Monday, November 22, 1999

Isle residents
banking on
Y2K controls

A survey shows that 62 percent
of Hawaii consumers don't plan
to withdraw extra cash

From staff and wire reports


Bank customers in Hawaii and throughout the nation have strong confidence that their banks' computers can handle the Y2K transition and few feel they need to take out cash before the end of the year, two surveys show.

Those who plan to take out money just in case don't intend to take out much, according to the surveys' results.

More than 90 percent of U.S. consumers are confident their banks are ready for the so-called Y2K computer bug, according to a Gallup poll done for federal regulators.

A separate survey in Hawaii, carried out for local financial institutions, shows that 62 percent of consumers have no plans to withdraw cash because of Y2K worries and another 14 percent say they will take out no more than they would need for a week.

Donna Tanoue, former state banking commissioner in Hawaii who now heads the Federal Deposit Insurance Corp., said their confidence is justified.

Federal agencies have been inspecting all banks and savings and loans and report that 99.7 percent of the institutions have tested their systems and know they will be ready for 2000, she said. Deposits won't be affected, she added.

"There are few guarantees in life, but the FDIC offers one of them," Tanoue said, commenting on positive results from a survey done for the Hawaii Bankers Association and the Hawaii League of Savings Institutions. "No one has ever lost a cent in a federally insured account and no one will," she said. Tanoue and other officials are recommending that those who worry that they might not have access to their money should not take out more than what they would need for a typical long holiday weekend.

There will be plenty of cash available, however, said Rodney Shinkawa, executive director of the two associations that sponsored the Hawaii survey.

"The Federal Reserve Bank is adding a cash reserve of $50 billion nationwide, over and above the normal money supply, to meet cash requirements for the Year 2000 date change," he said.

Experts predict some computers may malfunction or breakdown on or after Jan.1 because many computer programs use a two-digit designation for the year. The fear is that when the designation switches from ''99" to "00" for the year 2000, many computers will mistake it to mean 1900 or not know how to process the information at all. Businesses and governments worldwide have been spending billions to prepare their computers for the calendar change. The Federal Reserve and the FDIC, sponsors of the national Gallup poll, said consumer confidence in banks' Y2K preparedness has increased from 76 percent in a survey done in March.

"Only about 5 percent of bank customers currently indicate that they are very concerned about the Y2K issue, down from 11 percent in the March report," the federal agencies said. Meanwhile, the portion of people planning to take extra cash out of the bank fell to 39 percent from 62 percent.

In the Hawaii survey, conducted by SMS Research, 2 percent said they were "not at all confident" the banks can handle Y2K, but 55 percent described themselves as "very confident" and another 26 percent said they are confident.

Star-Bulletin reporter Russ Lynch and
Bloomberg News contributed to this report.

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