The Australian banking and financial sector is well prepared for the Year 2000 and continues to be internationally recognised as being at worlds best practice.
The Australian Prudential Regulation Authority (APRA) has advised that banks have essentially completed the remediation and testing of all critical systems and have contingency plans in place to deal with unexpected problems or problems outside of their control. These plans will continue to be reviewed and tested in the lead up to the Year 2000. Other financial institutions (namely, building societies, credit unions, life and general insurance companies, superannuation funds and friendly societies) have now completed the vast majority of remediation and testing of critical systems and are well into the contingency planning phase.
The critical systems of the Australian Stock Exchange (ASX) are now Year 2000 ready. The Sydney Futures Exchange (SFE) has completed the compliance testing of its core systems (with the exception of one new system which is currently undergoing Year 2000 compliance testing, expected to be completed shortly). Contingency planning by both the ASX and the SFE is well under way.
The ASX, in conjunction with a representative set of organisations (which included selected broking organisations, institutional settlement participants and banks), successfully completed an industry test during April 1999. In July 1999, the 22 participants of the SFE industry wide test, including 21 of the SFE's 25 clearing members, met the core success criteria with only one minor Year 2000 related problem reported which was rectified on the day.
The financial sector regulators, APRA, the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) have each completed their Year 2000 remediation and testing programs. Their business continuity plans have also been updated to incorporate Year 2000 issues.
As previously reported, a comprehensive program to test the Year 2000 readiness of the Australian payments system was successfully completed, on time, by 30 June and no Year 2000 problems were reported by test participants. Industry contingency plans for payments clearing arrangements have also been finalised. The major credit card schemes operating in Australia have also advised that they are well prepared for the Year 2000. As a result of these efforts, the public can be confident that their electronic payments mechanisms, such as ATMs, EFTPOS and credit cards, are Year 2000 ready.
The Governor of the Reserve Bank has already stated that customers deposits are safe and that their records are not at risk from Year 2000 related problems. There is no need for people to withdraw more money over the New Year period than they normally would for a long weekend. If they wish to do so, however, the RBA has built up ample stocks of currency notes to meet any increase in demand. The Governor of the RBA, in a statement to the House of Representatives Standing Committee on Economics, Finance and Public Administration in June this year, said that "the safest place for people to keep their savings is in the financial institution that they are already with".
Banks and other deposit taking institutions have also been communicating with their customers reassuring them that deposits and transaction records are safe from the Year 2000 computer problem.
The RBA and APRA are in the final stages of establishing a joint communications centre which will operate over the crucial date change period. This centre will ensure that the financial sector regulators are kept fully informed of developments during this key period and can communicate with regulated institutions and the Government as necessary.
The latest report of the Council of Financial Regulators, entitled "Year 2000 Preparations in the Australian Banking and Financial System", was released on 13 September 1999. This report provides detailed information on developments in the financial sector and the preparations of the regulators themselves. The report, and relevant contact information, can be found at the web-sites of the three financial sector regulators:
Reserve Bank of Australia www.rba.gov.au
Australian Prudential Regulation Authority www.apra.gov.au
Australian Securities and Investments Commission www.asic.gov.au