Federal regulators issued advice Tuesday on two more year-2000-related issues.

According to the Federal Financial Institutions Examination Council, financial institutions must develop due diligence processes to determine the year-2000 preparedness of their customers, service providers, and software vendors.

The purpose of assessing customers is to avoid incidental damage - such as loan defaults or liquidity problems - if a borrower, bond issuer, depositor, or market trader suffers year-2000-related computer problems. Monitoring service providers and vendors is intended to protect banks against internal data corruption.

Bank managers have until June 30 to implement a process for assessing customer-related risks, and until Sept. 30 to complete their impact assessment.

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