S'pore to take on 'millennium bug'

S'pore to take on 'millennium bug'

SINGAPORE (AFP): The Monetary Authority of Singapore (MAS) has told financial institutions to act against the "millennium bug" in computers to prevent major business disruptions, banking sources said yesterday.

The warning was contained in a circular sent out by the de facto central bank, which fears that financial accounting -- including calculations of interest, cash flow and due dates -- and other activities could go haywire.

The millennium bug is a programming glitch which prevents older computers from recognizing the year 2000, reverting to 1900 at the end of this century.

Singapore is Southeast Asia's financial capital and the world's fourth largest foreign exchange trading center after New York, London and Tokyo, with an average daily turnover of US$116 billion in 1995.

In the circular, quoted Tuesday by Singapore's Business Times, the MAS described the bug as "one of the most serious technical and operational issues confronting businesses today."

"Unlike other major developments, the year 2000 issue cannot be deferred," it said, urging banks and other financial institutions to address the risks "as the lack of proper planning and action could result in major business disruptions."

"Failure by banks and financial institutions, and even vendors, service bureaus and other parties to adequately address the year 2000 issue could potentially result in legal suits against them for failing to exercise due diligence in the fulfillment of their fiduciary duties," it warned.

The MAS ordered that work be completed on the problem by the end of 1998, the newspaper said.

A recent survey showed that nearly half the Singapore companies covered by the study had not begun to deal with the millennium bug, but most financial institutions were said to have taken at least initial measures, it added.