The Federal Reserve has created a year-2000 test lab for member banks to test their interfaces with the institution.

Banks can begin testing specific Fed applications in the simulated environment starting June 29. The Fed also has set aside six weekends- called shared testing days-for banks to test all their systems simultaneously. The shared testing days begin Sept. 18.

"We are trying to meet what banks need to do to certify their own systems," said Robert T. Ashman, the Fed's wholesale payments product officer.

The Fed connects with member banks through about 13,000 Fedline terminals and 600 direct computer links, all of which must be made year- 2000 compliant.

The year-2000 problem was created by programs with two-digit date fields that may interpret "00" as meaning 1900 instead of 2000. Regulators have required banks to test their external interfaces in addition to their internal technology systems.

Before signing up for Fed testing, banks must make sure their own interface systems are year-2000 compliant. They must also get an upgrading for the DOS-based Fedline system, which the institution is shipping this month. Additional upgradings for other system applications will be mailed in the fall.

Testing, which will simulate various dates, including the century rollover and leap year, will take place Mondays through Saturdays between 6 p.m. and 1:30 p.m. the next day. Banks must schedule sessions with their district reserve banks two weeks ahead.

The year-2000 test environment is similar to the Fed's existing depository institution test environment. The Fed is not publishing a test script, though bulletins and test coordinators are available at each reserve bank.

For its part, the Fed has rewritten all its code and completed external testing and customer-interface testing. The remaining internal testing should be completed by October, Mr. Ashman said.

The Fed's new Fedline for Windows NT workstations, to be released early next year, will handle years beyond 2000.

The securities industry also is creating simulated trading environments to ensure year-2000 compliance. The testing, under the direction of the Securities Industry Association, will cover the trading of everything from equities to corporate bonds to mortgage-backed securities.

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