FOR IMMEDIATE RELEASE
January 22, 2007
BLOOMBERG/SCHUMER REPORT: NY IN DANGER OF LOSING STATUS AS WORLD FINANCIAL CENTER WITHIN 10 YEARS WITHOUT MAJOR SHIFT IN REGULATION AND POLICY
Stringent Regulations, High Litigation Risk and Immigration Policy Causing New York's Financial Markets to Lose Business and High-Skilled Workers to London and her Overseas Competitors at Rapid Rate
Today, U.S. Senator Charles E. Schumer and New York City Mayor Michael R. Bloomberg released a groundbreaking report revealing that New York could lose its status as a global financial market without a major shift in public policy. Schumer and Bloomberg, together with New York Governor Eliot Spitzer, warned that New York financial markets, stifled by stringent regulations, and high litigation risks, are in danger of losing businesses and high-skilled workers to overseas competitors, relegating New York to regional market status and adversely impacting the U.S. economy. Today, Schumer and Bloomberg, with the backing of Governor Spitzer, unveiled a sweeping plan to revitalize U.S. financial markets and reaffirm New York's position as the financial capital of the world.
"If New York goes from being the financial capital of the world to becoming only a regional market, as this report predicts will happen within the next ten years, every aspect of New York life will suffer, not just financial services," Senator Schumer said. "The fact that Eliot Spitzer has joined us shows a united New York front in fighting hard to keep us where we should be, as number one."
"Let's be clear: The financial services industry is one reason that the 20th century was the American century and that New York became the world's capital," said Mayor Bloomberg. "We've outlined a range of practical yet innovative steps to ensure the 21st century is just as bright. This is one of many challenges to our long-term economic health and stability that require we move beyond partisanship to find solutions."
"If we don't address these problems now, New York is in danger of becoming a secondary city instead of the world capital it deserves to remain," said Deputy Mayor for Economic Development, Dan Doctoroff. "This report demonstrates what we suspected - the impact to our economy will be severe and the job cuts and financial toll painful."
Senator Schumer and Mayor Bloomberg commissioned the joint report, "Sustaining New York's and the U.S.'s Global Financial Services Leadership," which sets out a series of recommendations to counter emerging threats to the United States' position as the world's financial leader, with a two-tiered package of national and local measures aimed at removing impediments to financial services competitiveness both domestically and internationally.
Left unchecked, today's trends could significantly negatively impact the U.S. economy. The United States would miss out on between $15 billion and $30 billion in financial services revenues annually by 2011. Those revenues, if retained, could translate into as many as thirty to sixty thousand jobs in the U.S.
Identifying access to skilled professionals, a fair and predictable legal environment, and a responsive, market-oriented regulatory framework as top determinants of financial services competitiveness, the Mayor and Senator called for a coordinated, non-partisan implementation effort to improve America's performance along each of these dimensions and thereby strengthen the third-largest sector of the U.S. economy. Forming new public-private partnerships at the city and national levels to tackle these issues is an underlying theme of the joint report.
Mayor Bloomberg emphasized that policymakers must avoid complacency about New York's long-term future as a world-leading financial center. "Our capital markets and financial services firms will only enjoy continuing growth - growth that our city expects, needs and demands - if we take seriously the challenges from rapidly-expanding competitors in Europe and Asia," said the Mayor.
Senator Schumer pointed out that strong financial markets are crucial to the health of both New York's economy and the nation's; financial services drive 8 percent of U.S. GDP, and create more than 5 percent of all jobs nationwide. "This is not simply a New York issue," the Senator said; "Seven states, including New York, have more than 10 percent of their state's GDP derived from financial services, and strong financial services are important to everyone regardless of where they reside or do business."
The joint report outlined a number of recommendations intended to improve America's financial services competitiveness for both the United States and New York, described on the attached Fact Sheet.
In its analysis, the joint report highlighted the fundamental importance of the U.S. financial services sector to the national economy. Although U.S. financial markets lead globally in many dimensions - the U.S. is still the world's largest repository of financial stock and it derives more revenues from financial services than any other country - this leadership is under significant threat as a variety of forces combine to undermine U.S. competitiveness.
Recommendations to sustain the nation's and New York's global financial services leadership:
(Schumer) Risa B. Heller (917) 647-9187
(Spitzer) Christine Anderson (212) 681-4640
(Bloomberg) Stu Loeser/John Gallagher (212) 788-2958
Read report (in pdf)
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