Banks may be able to strike one area of concern off their list of potential year-2000 problems.

Experts say banks in emerging-market countries will not present as big a problem as had been feared. Even though many are unprepared for the year- 2000 switch, they typically are not very reliant on technology.

Though countries in Africa, as well as Russia and China, reportedly have not made adequate preparations, "you have to look at the potential impact in those markets," said Brian D. Robbins, senior vice president and year- 2000 director at Chase Manhattan Bank.

"Focus your plans on the countries of greatest impact, and they will generally be those of greatest readiness," Mr. Robbins said at a conference organized by the New York Society of Security Analysts this week.

George Juncker, vice president in the bank supervision group of the Federal Reserve Bank of New York, said, "The United States market is the most heavily dependent on technology, with its open architecture, complex market, and real-time dependencies." The rest of the world, with its lack of automation, "can avoid many problems, even if it is lagging," he said.

He emphasized a need for self-evaluation and disclosure among other countries.

"There is a great deal of foreign suspicion about what Y2K is," he said. "Some people, particularly those in emerging markets and Third World countries, think the U.S. invented it to get competitive advantage."

International organizations are using Web sites to dispel such myths, he said, including those of the Bank for International Settlements' Joint Year-2000 Council ( and the United Nations (

"It is critical that organizations disclose their status, plans, and progress against those plans now," Mr. Juncker said.

Though countries outside of the U.S. are "building momentum," the infrastructure for telecommunications and energy "may be a challenge," Mr. Juncker said.

In the second weekend of June, the Federal Reserve, the New York Clearing House, and the Society for Worldwide Interbank Financial Telecommunication will conduct a cross-border test of the major global payment systems.

In the past month, the Federal Reserve also has begun to focus on contingency planning, holding meetings with 20 domestic and foreign banks.

"At these meetings, we're really focusing on what they're doing to meet credit, liquidity, and operations risks," Mr. Juncker said.

He said "behavioral issues" may become a greater challenge than technical issues. "Fear can cause panic and abnormal behavior," he said.

Mr. Robbins agreed that consumer behavior may present more problems that the date-change itself. Chase is mailing statement-stuffers to customers, assuring them that it is ready for the date change, and it plans more aggressive marketing in the second and third quarters, he said.

Mr. Robbins expects short-lived residual effects after the event. "Most organizations will experience Y2K as a nuisance or set of contained problems."

He said problems in the financial industry would take less than three days to fix.

"If a problem remains, it will be isolated, found, and resolved very quickly. Our efforts should focus on minimizing the effects of potential high-impact decisions."

Lessons learned from the introduction of the euro, Mr. Juncker said, were that command centers worked very effectively and were kept in place before, during, and after the event.

Like the euro, the year-2000 switch has a "fixed deadline and is a large and complex process." Unlike the euro, year-2000 is global and can affect virtually any computing device and process, including chips embedded in appliances and the archiving of backup files.

U.S. banks are largely finished with their internal testing and are due to complete external testing by June 30, Mr. Juncker said. Once the work is complete, "the U.S. can help others."

Chase is 99.7% finished with its technical conversion and has completed most of its testing, Mr. Robbins said.

"Technology has got us to the point we're at," he said. "Business will drive us over the finish line."

He added that the year-2000 is not a race for one company to win. "The more everyone is ready, the better off we'll all be."

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