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Some execs wary of Y2K
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September 27, 1999: 11:19 a.m. ET
CFOs confident in their readiness, but about a third fear effect on economy
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NEW YORK (CNNfn) - More than one-third of businesses expect the U.S. economy to experience negative effects related to the Year 2000 computer bug, according to a survey disclosed Monday.
Although 63 percent of chief financial officers who participated in the survey conducted by the Financial Executives Institute (FEI) and Duke University expect the Y2K bug to be a non-event, 14 percent anticipate a market-wide sell-off in response to any problems. Thirty-seven percent of the financial chiefs said the economy is likely to suffer some problems related to the millennium bug.
"There is still some trepidation about Y2K, as 6 percent of CFOs expect their firm will be subject to lawsuits as a result of problems that occur when the calendar changes from 1999 to 2000," said Duke University finance professor John Graham, director of the survey. "And 13 percent of banking and finance firms anticipate lawsuits."
The results echoed comments recently made by Federal Reserve Chairman Alan Greenspan, who said that while any threat of the millennium bug is "negligible," some Y2K-related failures could have "noticeable effects" on the economy.
While many of the CFOs surveyed expressed some concern about the economy, they don't anticipate widespread disruptions to businesses' financial performance.
"Only 2 percent of the respondents expect that Year 2000 will interfere with their ability to provide products and services, and only 3 percent believe that their companies' suppliers will have difficulties resulting from Y2K," said Philip Livingston, FEI president and chief executive officer.
FEI and Duke University conducted the survey among CFOs at 272 U.S. companies.
The Y2K bug refers to problems computers may face during the transition from 1999 to 2000 because many computers are programmed to recognize only the last two digits of the year. Computers may recognize 2000 as 1900 or may cease to function altogether.
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