Well-prepared banks and thrifts can use the year-2000 problem to their competitive advantage, an information services executive said Thursday.

John A. Meyer, president of the financial services unit at Electronic Data Systems Corp. of Plano, Tex., said bargain-hunting banks "will enjoy a buyer's market" as less-prepared competitors look to be acquired before Jan. 1, 2000.

Mr. Meyer also anticipates a fire sale on assets held by banks that fail.

"Regulators will shut down noncompliant firms, and the industry will likely see a scenario similar to the formation of the Resolution Trust Corp. in the late '80s, when assets from failed institutions were repackaged and sold at bargain prices," he said.

Speaking at a conference sponsored by the Brookings Institution and the University of Pennsylvania's Wharton School, the EDS official said other perks await aggressive U.S. banks that are year-2000 compliant.

For example, a bank that has excess capacity to service mortgage loans or process credit cards could offer such services to firms that are overwhelmed by year-2000 concerns but not ready to leave that business.

Fears about foreign banks' year-2000 readiness could provide a windfall of business for U.S. banks. "The upside of absorbing foreign business is substantial, taking on market share that normally is very costly to target," he said.

Mr. Meyer also offered advice to financial services companies that are unable to prepare certain business lines for the year-2000. Where possible, he said, such companies should seek to outsource, rather than sell, business lines.

"When you exit business lines, you really hurt your competitive advantage," he said.

Mr. Meyer acknowledged that EDS stands to gain from an increase in outsourcing by banks. Year-2000 concerns have led five U.S. financial services companies to sign outsourcing contracts with the company, he said.

EDS provided an undisclosed amount in support for the conference, whose sponsors asked Mr. Meyer to draft a paper concerning the year-2000's implications for banks. His comments on Thursday offered a preview of that paper, which he will present today.

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