Chairman Donna A. Tanoue on Wednesday said the Federal Deposit Insurance Corp. will crack down even harder on banks that are behind in fixing year-2000 computer problems.

"Time is getting shorter," Ms. Tanoue told the National Bankers Association. "So if we find a significant problem, we will want it fixed.

"We will use enforcement actions to persuade the unconvinced."

The banking system rests on the public's confidence that funds can be withdrawn when needed, she said. If year-2000 problems weaken this trust, banks may never recover, she warned.

"Your customers will want to know that you have done everything that can be done to become Y2K-ready," she said, using a common abbreviation for year-2000.

Ms. Tanoue also warned bankers to prepare for rough economic times. The Asian financial crisis has weakened demand for U.S. exports, the U.S. stock markets are down sharply from their recent record highs, and depositors are fleeing from Russian banks, she noted.

"If we look ahead, we see warning signs," she said. "Where warranted, we are advising banks to alter their directions to avoid such risks. Despite more than seven years of economic expansion, no one can afford to be complacent."

She pointed to the recent failure of BestBank in Colorado, which was sunk by subprime loans. "The number of problem institutions involved in this area continues to rise," she warned.

Finally, Ms. Tanoue said the massive consolidation among big banks is presenting an "unprecedented challenge" to regulators. Although she presented few ideas on how supervision must change to handle megabanks, she did say that these banks and regulators will have to share more information.

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