Banks are ready for a Y2K cash rush
Local bankers say they are prepared for whatever happens Jan. 1, 2000 – although they’ll all be closed that day, and won’t be faced with customers until Jan. 3.
And those bank officials who could be reached Wednesday said their institutions are equally prepared to handle an expected jump in withdrawals by customers who feel a need to have a little extra cash on hand for the “Y2K weekend.”
But so far, according to Aspen banker Steve Briggs, “We haven’t seen anything system-wide, and we’re tracking it.” As far as Briggs and others can tell, there won’t be lines of cash-hungry citizens in front of the banks on Friday, Dec. 31, 1999.
While most official warnings to the citizenry have suggested people keep some extra cash on hand for the New Year, the public also is being urged to not withdraw so much that it creates cash-flow problems for the banks.
Jan. 1 is the day that most of the world expects to learn whether the so-called “Millennium Bug” is a problem or not. The famed computer programming glitch may cause computers to think it is the year 1900 instead of 2000 on Jan. 1, with unforeseen results.
Nationwide, banks have been making preparations for the potential problem for several years in some cases.
Federal bank regulators would not release the findings of a 1998 Y2K preparedness survey of the nation’s banks. But by the middle of this year they were saying that at least in the United States, the banking industry appeared to be making the necessary changes and improvements needed to avoid widespread disruptions in service due to the Y2K glitch.
According to published accounts, many large corporate banks have been spending in the $500 million range per bank to get ready for the date change on Dec. 31.
Mike Taets, president of the Aspen branch of Norwest Banks, said he was told by a corporate executive that Norwest has spent $315 million on the problem since beginning preparations in 1996.
“We’re ready,”Taets said, noting that Norwest’s $200 billion-plus in assets means there will be ample cash on hand for local customers who might want to withdraw some money – just in case.
“Banks never like to talk about how much cash they have [on hand],”Taets remarked. “It’s like saying, `Come on in and rob us.'”
But, he said, the bank is expecting to have enough to meet the need.
“We don’t think we’re going to have any issues at all, unless someone comes in and pulls out an obscene amount of cash,”Taets predicted. Asked what “obscene” might mean, he replied, “Seven figures.”
Briggs, president of the Alpine Bank in Aspen, said that the regional chain of Alpine Bank branches is set for the weekend.
“We have a plan, and fortunately we can spread it out over a number of locations. So if one comes up short, another can help out,” he said.
But so far, Briggs said, there has been no indication that people in the valley are planning to squirrel away large amounts of cash.
“We were expecting to see something, and we haven’t seen anything more than normal” in terms of withdrawals, he said.
If a sudden rush of withdrawals does get started, he said, Alpine has made arrangements with the Federal Reserve Bank in Denver to get emergency cash supplies.
“Everything is pretty much normal,” Briggs said. “The [lack of] snow is probably a much bigger story.”
At the Bank of Colorado, a multistate chain which has local branches in Glenwood Springs and El Jebel, they also are ready for cash-hungry customers.
“I think you’ll find that all the banks have plenty of cash,” said bank president Dave Armbruster
But, he said, it seems that at least locally, people are heeding the advice of the statewide banking association, which is that “the safest place for their money is in a bank, instead of in their pockets.”
He said the latest communication from the Federal Reserve is that “100 percent of the banks in the country are Y2K compliant.”
Voicing the common sentiment currently being spread by government and corporate interests, Armbruster said, “I feel pretty comfortable, just in general, about things. And about the banks, I have no concerns at all.”
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