Concern over how the banking industry will weather the Y2K challenge has led some communities to think about adopting local currencies and creating resource banks.

Jacqueline Miller of Partnerships for Change in San Francisco said: 'People are open to these concepts now. There is incredible interest. We are very grateful for Y2K because we are getting a lot of phone calls about Bay Area Bucks, Bay Area Benefits and our Resource Exchange Bank.'

Attorney Andrew Michael, who heads Partnerships for Change, talks to groups to explain how to set up systems that tap local resources and use a local or regional currency to reward services.

'Our Resource Exchange Bank is an inventory of people resources,' said Miller. 'If things break down with Y2K, we do not have to depend on the established system but can call upon participants.'

The movement to establish community currencies was under way before Y2K became an issue of general concern. One group, Ithaca HOURS in Ithaca, N.Y., began in 1991, and Partnerships for Change started up in 1993.

According to proponents, local currencies allow communities to control their economic growth by keeping capital, and decisions for using that capital, local. The currencies value labor in terms of time devoted to a task.

Under the Ithaca HOURS plan, each 'hour' is worth $10, the average hourly wage in the area, and can only be spent locally.

Paul Glover, founder of Ithaca HOURS, has created a Y2K Team plan outlining how a community can respond in a worst-case scenario. This plan has been adopted by the Ithaca community Y2K group, of which Ithaca HOURS is a part. 'We are printing up extra supplies of our Ithaca HOURS. This would be distributed in the case of severe and prolonged financial disturbance,' he said.

According to Glover there has been growing interest in the Ithaca HOURS web site, and one man purchased $200 in HOURS to have on hand in case there is a disturbance in the value or availability of dollars. To help other groups, Ithaca HOURS has developed a hometown currency starter kit and video, available for $40 by writing to HOUR Town, Box 6578, Ithaca, NY 14851.

According to Lewis Solomon, a professor of business law at George Washington University Law School, such currencies are legal provided they follow certain guidelines.