Public response to the year-2000 computer change is the greatest challenge facing regulators and the banking industry, according to Federal Reserve Board Governor Edward W. Kelley Jr.

"The most important single element in our successfully navigating through the challenges presented by the millennium bug is how the public responds to it," he said in a speech at the Media Studies Center here.

"The financial system will not seize up or crash," he said Wednesday. "A guarantee? No. An educated confidence? Yes."

In his speech, "Y2K: The Press and Preventing Panic," Mr. Kelley advised journalists to learn the facts and inform the public.

"Let's not let 'experts' make unproved assertions, or offer personal opinions as facts, without challenging the basis for them," he said. "And let's not treat isolated events as if they were a broadly general reality."

Complete and reliable information is every bit as important to this country's success in preparing for the year-2000 rollover as all the technical work being done, he said.

Mr. Kelley said he is concerned about "the possibility of our citizenry becoming so overly worried about what might happen that there could be created the very type of problem we are working so hard to prevent."

He urged bankers to assure customers that they will have ready access to cash, their records are secure, and their deposits are federally insured up to $100,000.

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