Supervisors can also be expected to more closely monitor banks’ efforts to identify and manage operating risks. One very important operating risk that all banking institutions face is the challenge of addressing the Year 2000 issue. U.S. banks appear to be taking this matter seriously and are generally well underway toward identifying individual needs and developing action plans.
The Federal Reserve and the other federal bank supervisors are reviewing the relevant efforts of every insured depository institution in order to determine whether adequate progress on this issue is being made. Meeting the demands of this review and ensuring proper remedies both before and after the Year 2000 will be a significant and costly task to both the industry and the banking agencies.