WASHINGTON - In mid-1998, federal regulators cited more than 1,000 banks and thrifts for year-2000 problems, but today they can count the nation's Y2K stragglers on one hand.

At present, only five banks - and no thrifts - are rated "needs improvement" or "unsatisfactory" for their efforts to prepare computer hardware and software for the new year. That compares with 1,046 banks and thrifts as of May 31, 1998. The number is expected to shrink even further when the FDIC updates its Y2K problem list later this week.

Bank regulators refuse to name the five institutions, citing federal confidentiality requirements. Policymakers fear that publishing a troubled bank's name could lead to an unnecessary and harmful run on deposits, or a rapid selloff of bank stock.

Some information about the five is known, however.

According to the FDIC, the less-than-satisfactory banks are relatively small, with average deposits of $126 million. Three of the five have received an "unsatisfactory" grade, the worst rating, while two are rated "needs improvement."

Moreover, regulators say, the banks' year-2000 problems are relatively mild.

None, for example, is operating with computers that have not been checked, fixed, and tested for year-2000 flaws. Most of the banks have tripped the regulators' Y2K wire by a less ominous route, such as by failing to properly document their efforts. And the remaining 10,300 banks and thrifts are now rated "satisfactory."

"It's not a big deal," said one agency official.

Still, all five banks cited by the FDIC are required to make backup copies of customer account data. The copies would be crucial if an institution suffered a catastrophic data crash, was taken over by regulators, or had to switch data processors at the last minute.

Though bank regulators are prohibited from sharing a bank's ratings with the public, some people believe uninsured depositors and bank shareholders have a right to know if their institution is in trouble.

That message has come through loud and clear at the FDIC. After a Nov. 7 article in Parade magazine incorrectly reported that the agency's Web site would post a list of the banks with less-than-satisfactory Y2K ratings, the site was besieged with visits from some of the weekly publication's 82 million estimated readers, seeking information. But no such list was published.

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