The detailed structure of the options and the role they played in the Desk's reserve management strategy around year-end are described later in the section "Reserve Management around the Century Date Change.
The Desk's reserve management efforts during the fourth quarter of the year, described in the next section, "Reserve Management around the Century Date Change," contributed to some persistent softness in that quarter, much like during the corresponding quarter of 1998.
Events associated with the century date change dominated reserve-management efforts in the final quarter of 1999.
Second, there was widespread concern that participants in financing markets would be less willing to maintain normal levels of trading and market intermediation around the century date change, which threatened to interfere with the efficient allocation of credit in the financing markets more generally.
The purpose of these options was to provide tangible encouragement to primary dealers to continue to make markets and to undertake their normal intermediation activities in securities markets, so as to sustain the liquidity of these markets around the century date change.
There were no unusual movements in the spreads between overnight financing rates for different classes of collateral and the federal funds rate that could be attributed to the growing size of the Desk's holdings of collateral or to market anxieties about the century date change.
The century date change itself did not cause any technical problems for the Desk or for market participants that affected trading conditions in the financing markets.
Various segments of the financial services industry, particularly those operating abroad, have suggested that governments adopt an additional holiday around the century date change.
They correctly believed that declaration of a Year 2000 holiday at a later time would impede an organization's ability to limit changes to remediated systems during the period surrounding the century date change.
gov/y2k/ Federal Reserve Century Date Change Project-- http://www.