Although most say they're ready, financial institutions can alleviate any nervousness about Y2K by taking advantage of special loans being offered by the Federal Reserve Board.
On July 20, the central bank's governors unanimously approved making the special loans available to banks, thrifts and credit unions from Oct. 1 through April 7, according to an article by the Associated Press. The loans are designed to meet the expected rush on cash near the year's end by consumers with Y2K fears.
This is the second step the Fed has taken to prepare for Y2K problems. Last year, it ordered an additional $50 billion of new currency to be placed into circulation to prepare for consumers making a dash on ATMs toward the end of this year.
As a result, $200 billion in currency will be stored for reserve in government vaults, which is in addition to $460 billion in notes circulating in the U.S. and worldwide. Normally, $150 billion is held in reserve.
Banks will pay an interest rate somewhat above the current 4.97 percent rate that banks charge each other for overnight loans.
Although banks remain confident about meeting Y2K demands, the loans will bolster security.
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