Continuing improvement in Year 2000 readiness in the financial sector
11/10/1999
The Financial Services Authority today reported a major improvement in Year 2000 readiness in the financial sector. As at 30 September no high or medium impact groups were rated Red. 98% of high and medium impact groups were rated Green or Blue (programme completed or on track) and there were only 7 Ambers (behind but expected to catch up). This compares with 2 medium impact Reds and 28% high and medium impact groups rated as Amber in the FSAs last report on 22 July.
Commenting on these figures Michael Foot, Managing Director and Head of Financial Supervision at the FSA, said:
"Progress continues to be very encouraging with a significant improvement in performance since we last reported. There is now a high level of confidence that it will be business as usual in the UK financial sector. 98% of high/medium impact groups are now rated as Green or Blue. No high/medium impact group is rated Red and only 7 firms in this category are Amber.
"But we are not letting up in our efforts to ensure the sector is fully Year 2000 ready. We shall continue to monitor the performance of firms very closely, particularly the remaining Ambers. And, if necessary, we will take the action we judge is required to protect the interests of stakeholders - depositors, policy-holders and investors. If circumstances require, we will publish our actions where the interests of stakeholders appear to warrant it. We will, of course, also continue to keep the public informed of the progress of the financial sector".
The FSA will update the traffic light information given above at the Action 2000 National Infrastructure Forum on 21 October. Then and thereafter all FSA information in this area will be based on the same traffic light system as that used by Action 2000.
Notes for editors
The Action 2000 Traffic Light system uses the following definitions:
Blue "The assessment has not identified any risks of material disruption to the infrastructure process"
Amber "The assessment indicates that there is some risk of material disruption to infrastructure processes, but that there is an agreed containment plan to rectify shortcomings"
Red "The assessment indicates that there is a severe risk of material disruption to infrastructure processes and that timely rectification may not be possible"
White "unable to form assessment with the present level of information"
The FSAs assessment of firms'' Year 2000 preparedness is based on regularly updated information on their progress in remedying business critical systems and in preparing effective business continuity plans. The FSA required all High, Medium and Low Impact firms to provide completion statements by 30 September.
The primary responsibility for achieving Year 2000 compliance and effective business continuity rests with financial institutions themselves. Year 2000 is a regulatory issue because of its impact on depositor, policy-holder and investor protection; on prudential soundness of financial institutions; and market integrity. Promoting Year 2000 preparedness is a major FSA supervisory priority.
The FSA has a dedicated Year 2000 section on its web-site, which includes Publications, Speeches, Press Notices, and Guidance for supervisors and links to other Year 2000 sites.