System conversion for the new millennium went smoothly for the world's banks and financial institutions over the weekend, but experts remained on guard for problems that might crop up when the majority of the world's computers reboot on Monday morning.
"There has been no significant trouble at all," said Federal Reserve Governor Edward W. Kelley Jr., who spent most of the weekend at the central bank's year-2000 command center in Washington. Any "glitches" were "isolated and temporary," he said.
Many banks kept staff on hand over the holiday weekend to make sure that computers properly recognized the switch from 1999 to 2000 -- a potential problem that companies worldwide had spent an estimated $600 million to fix.
Typical was First Union Corp., which had 5,000 employees working. Spokeswoman Mary Beth Navarro said the Charlotte, N.C., banking company set up command centers at its headquarters and for each business unit. Employees checked everything from computers and on-line hookups to water and electrical systems and found "everything up and ready for Monday," Ms. Navarro said.
Citigroup spokesman Richard Howe on Sunday reported "business as usual" at the financial services company's 15 command centers around the globe. He said the company was continuing to monitor the situation.
Reuters reported that Summit Bank, which operates 493 branches in New Jersey, Pennsylvania, and Connecticut, had 90% of those facilities open Saturday and reported no year-2000 problems or unusual volume of withdrawals.
Similarly, the news agency reported, City National Bank in West Virginia kept 10 drive-through facilities open all night New Year's Eve, staffed with employees wearing T-shirts proclaiming, "We're not afraid of Y2K." Spokesman Jeff Legge reported no problems. "Everything worked according to plan," he said.
Perhaps the first U.S. banking transaction of the millennium took place at an automated teller machine operated by Bank Pacific in Guam. Philip Flores, chief executive officer of the $95 million-asset bank, withdrew $200. He said that the successful switchover may have seemed anticlimactic after all the publicity the Y2K problem received, but that the industry should take credit. "People say it's a non-event, but really the event's taken place over the past two years as people got ready."
At Merrill Lynch & Co., the biggest U.S. brokerage, yearend trade processing was finished several hours ahead of schedule, at 8:00 a.m. Sunday, and the firm's toll-free help line received fewer calls this weekend than usual, according to spokeswoman Bobbie Collins.
The discount brokerage leader Charles Schwab Corp. sent some of its 1,800-member "millennium force" home early.
In Washington, the Federal Reserve had 100 people working in shifts over the weekend, ready to react to any problem. Mr. Kelley said the team would continue its "very high level of readiness" through this week.
"We are going to be very alert to possible surprises," he said, but added that the Fed does not expect any problems to surface. Its Y2K team is scheduled to remain on alert until week's end but could disband sooner depending on how things go.
The Fed's next focus will be absorbing the huge amount of cash that consumers and their banks stockpiled in case computers had malfunctioned. "Banks need to get that cash out of their vaults and off their balance sheets," Mr. Kelley said. "The river is reversing flow."
The demand for cash was not as strong as some experts had feared, but Mr. Kelley praised the industry for being prepared. "I commend the industry for doing a wonderful job -- at considerable inconvenience and expense," he said.
Mr. Kelley said he did not have figures on how much cash was withdrawn ahead of the New Year's weekend or how much has started flowing back to the Fed.
Similar reports came from central banks around the globe, and bankers said they expected business as usual when they open for business Monday. One exception was Jamaica, which asked its banks to remain closed until Tuesday while computers are checked for problems.
Major stock and bond exchanges and their clearing houses here and abroad reported they were fully operational and ready for business on Monday, although a few glitches appeared overnight New Year's Eve.
There were instances of trade reports recording the year as 1900 instead of 2000 and a decimal-point problem that changed net asset valuations, a spokeswoman for the Securities Industry Association told Reuters. The decimal problem caused $35 to show up as $3,500, for example.
But those issues were resolved, said Margaret Draper, assistant vice president of corporate communications at the SIA. She declined to say which institutions experienced the problems and said it was unclear if they were Y2K-related. "It isn't over. Trades still haven't been entered but early indications are good. We're extremely optimistic," she said.
Outside of the financial industry, five nuclear power plants reported minor computer problems, and the Pentagon disclosed that a reconnaissance satellite had been blinded for a few hours.
John Koskinen, chairman of the President's Council on Year 2000 Conversion, rejected suggestions that the country may have overreacted or overspent on the potential problem. "It is far too early for us to feel totally satisfied and to declare victory," he said. "I think we have another three or four days of careful and close monitoring ahead of us before we can truly determine how successful we have been."
Mr. Koskinen and other observers are also looking ahead to another potential hitch in computer-date software -- the leap-year day, Feb. 29.
Contributing to this article: Barbara A. Rehm and Bloomberg News.
