Financial services well prepared for the millennium

This was the message today from Michael Foot, Managing Director and Head of Financial Supervision at the Financial Services Authority, in a keynote speech to a major Year 2000 conference hosted by the FSA.

Michael Foot said:

"There are many positive indicators to justify the belief that the financial sector - both infrastructure and individual firms is well prepared and that it will be business as usual into the New Year. Independent assessments by the FSA, the Bank of England and the information put out by the industry indicate a very high level of readiness. We have reached mid-November with no significant glitches. The indications of consumer opinion, confidence in the wholesale markets, the behaviour of fund managers and of lenders all indicate a high level of confidence that it will be business as usual.

"I am pleased to be able to confirm that using the Action 2000 traffic light system, all High and Medium Impact firms are Blue. However in the unique circumstances of Year 2000 there can be no certainties and no complacency. Firms must remain fully focused on Year 2000 during the remainder of the year and the Millennium date change itself. They need to have in place well planned and fully tested business continuity plans; they need to track market and consumer opinion closely; and to implement effective communication strategies with their customers and counterparties.

"The FSA is fully geared up for the final lap. In the remaining weeks of the year, we will continue to promote consumer and market confidence and provide the markets, the public and the media with an independent perspective of the readiness of the UK financial sector.

Over the Date Change period itself we will operate a 24 hour-a-day Millennium Event Office monitoring the situation in the UK and worldwide, and we will make periodic statements about overall progress towards opening for business and later about how the industry has opened for business".

Notes for editors

About 600 delegates attended the conference "Year 2000 Continuity Planning and Preparing for the Millennium Weekend" at the Queen Elizabeth II Conference Centre organised by City & Financial in conjunction with the Financial Services Authority. Speakers included representatives from the Bank of England, APACS (the payments and cheque clearing system), the London Stock Exchange and major financial institutions.

The Action 2000 Traffic Light system defines Blue as "The assessment has not identified any risks of material disruption to the infrastructure process".

There are 144 High Impact groups and 265 Medium Impact groups.

The FSAs assessment of firms'' Year 2000 preparedness is based on regular updates on their progress in remedying business critical systems and in preparing effective business continuity plans.

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.