Recent legislation reduces the legal liability for statements made in good faith that later turn out to be inaccurate. Supervisors have been supportive of these efforts, and I encourage each of you to consider whether substantial impediments to meaningful information sharing may exist in your own countries. The final point that I will make in this area concerns the power of leading by example. As supervisors and regulators, we should each strive to communicate frequently and openly with our constituents about our own Year 2000 programs. At the Federal Reserve, we BIS Review 85/1998  -5-  have testified before Congress on our efforts and have made available a large amount of material through the World Wide Web and numerous publications. As leaders in the financial markets, it is important that we set the right tone in promoting information sharing and transparency in our own preparations. Assessment and the Role of the Supervisor I will now turn to the role of supervisors in promoting Year 2000 readiness among the firms that we supervise. The primary effort must be to communicate the seriousness and urgency of the problem to the firms under our jurisdiction. In the United States, the bank supervisors are examining every bank operating in the United States regarding its Year 2000 program. As part of this program, the Federal Reserve conducted reviews of approximately 1,600 organizations, including a significant number of foreign banking organizations.
Critical infrastructure such as transport, water, power and telecommunications systems are also likely to be affected. Nearly all aspects of the economy in every country are therefore potentially at risk because of the widespread dependence on a country’s core infrastructure. The unprecedented scope of the Year 2000 problem means that a critical aspect of the issue is the management challenge. Substantial management resources are needed to coordinate the efforts to assess, repair, and test affected systems prior to the fixed deadline of BIS Review 85/1998  -2-  January 1, 2000. At the Federal Reserve, for example, we have created a number of management positions within our organization that are focused exclusively on different aspects of our Year 2000 preparations. A final point that underscores the need for urgent and sustained action is the increasing focus on the issue by the media, by the public and by market observers such as the rating agencies. Over the course of 1999, the extent of Year 2000 preparations by financial organizations will become the subject of ever more intensive scrutiny. As supervisors, therefore, we must do all we can to support the efforts of market participants to address the problem effectively, and to build confidence among others that this is being accomplished. While we must make it clear that supervisors cannot solve the problem, we can help mobilize others to take the necessary steps.