The risks of some disruption to international trade and financial markets are not to be discounted completely, and the consequences of inaction are grave. The world economy functions through its financial services markets, and it is not a surprise, therefore, that the Year 2000 preparedness of the financial services industry is of great interest.
Should there be no Government fiscal response to the present situation, and should a fiscal deficit subsequently emerge, the confidence of foreign investors could be somewhat undermined - with resultant upward pressure on interest rates and downward pressure on the exchange rate.