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Subject: greenspan on y2k
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Yahoo! News
                                                           Tech Headlines


Friday September 17 9:13 AM ET 

Greenspan Discusses Y2k Impact

WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan
said Friday there was a risk of bottlenecks in the U.S. economy resulting
from the fear of end-of-century computer problems, but widespread
disruption was unlikely.

Speaking before the President's Council on Year 2000 Conversion, the U.S. central banker said
he was confident that the risk of any widespread breakdown to critical business infrastructure from
the computer bug was ``negligible.''

``If only a small percentage of businesses choose to add to their inventories as a hedge, the effect
on production will be insignificant,'' Greenspan said.

``However, should a large number of companies want to hold even a few extra days of inventories,
the necessary, albeit temporary, increase in production (or imports) to accommodate such stock
building could be quite large. Bottlenecks could develop, and market pressure could ensue,'' he
said.

Economists are unsure how the public response to the computer bug, which prevents some
computers from distinguishing 2000 from 1900 because of an old programming shortcut, will affect
economic activity. Inventory building by businesses could add to economic growth and inflation
risks or a widespread technical breakdown and public panic may undermine the economy.

Greenspan noted that the U.S. public was more sanguine about the coming event, which should
ease fears of major disruption, though ``we are not as yet home free.''