|
|
U.S. Banks Y2K Expenses Higher than Expected
Two of America's major banks have increased their budgets to solve the Year-2000 computer date problem.
Chase Manhattan Corp., which has hired 1,000 people to work on the project, has increased its Y2K budget from $250 million to $300 million, according to senior vice president Steven L. Sheinheit. Equipment upgrades, increased computer testing, and contingency planning costs contributed to Chase's increased spending, he said.
BankBoston Corp., one of the early leaders in announcing Year-2000 solutions, now expects to spend $75 million. It had originally budgeted $50 million.
Most analysts are not surprised by the shifting figures. "Determining the amount of repair and remediation to be done and the associated costs is an ongoing process," Kevin Timmons, senior bank analyst at First Albany Corp, told American Banker.
Chase has assessed 98% of its systems, including 2,700 applications and 3,000 external interfaces, according to Sheinheit. The banks three-year plan includes the creation of "time machines" to simulate the Year 2000 change. This equipment will aid the bank in testing multiple systems simultaneously.
Regulators of the U.S. banking industry are requiring lending institutions to disclose how they plan to address the Year-2000 date problems.
•Citicorp, $600 million
•BankAmerica Corp $380 million
•J.P. Morgan & Co. $250 million
•Fleet Financial Group Inc., $150
•NationsBank Corp., $120 million
Source: American Banker