Banks to determine loans on firms' millennium awareness
Thursday 15 January 1998
The British Bankers' Association (BBA), the trade body, yesterday published its "Year 2000 checklists". These are to be distributed to BBA members in an attempt to help banks gauge their corporate customers' readiness for the year 2000.
Mike Young, assistant director of the BBA, said: "Year 2000 readiness will become an increasingly important part of credit assessment. Businesses that can't or won't discuss the year 2000 will strain their relationship with their banks."
The four-page checklist was published by the BBA, with the aid of banks, after requests from BBA members to take a lead on co-ordination of year 2000 policy. Banks will not be forced to use the checklist, which has been designed to act as "a basis for discussion between bank and customer".
The Federation of Small Businesses (FSB), which represents around 112,000 small companies in the UK, yesterday warned that businesses without millennium bug policies should act "sooner rather than later".
A FSB spokesperson said: "Up to now the banks have been very good [with businesses lacking a millennium bug policy]. But it will get to a stage when banks will start getting worried. Now is the time to act."
It is not only the bank manager who is likely to start demanding evidence of year 2000 action from companies. Katie Morris, chief executive of Cisco, which represents smaller quoted companies, believes that companies wishing to float or make rights issues could also have to prove they are "millennium bug-free".
"Companies should increasingly expect to be asked about the year 2000," she said.
The BBA was optimistic yesterday that its own members would be fully prepared for the millennium. Mr Young said: "I am pretty confident that the banking industry in the UK will be year 2000 ready by 31 December, 1998, although I am not in a position to issue any guarantees."
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