FOR IMMEDIATE RELEASE
April 22, 2010
MAYOR BLOOMBERG DISCUSSES PRESIDENT OBAMA'S SPEECH ON FINANCIAL REFORM
Remarks as delivered in Times Square after the President’s speech follow:
“Before I take some questions, let me just start out by saying how glad we are that President Obama came to New York City to make his case for financial reform.
“As you know, New York City isn’t just the biggest marketplace in America, we're also the very center of the marketplace of ideas. From art to architecture, from publishing to politics, if you have an idea to share – or to sell – New York City is the place to do it. And so we welcome the President to New York today and we hope he comes back next time he wants to make a case for something.
“Now I do agree with the President that we need real reform of our financial industry – and it needs to be the right kind of reform that won’t put New Yorkers out of work and hurt our country and our City’s long-term economic future. The financial services industry accounts for some 500,000 jobs in our City, and the typical worker in the industry is middle class, with a salary of about $70,000.
“I agree with the President that there is no dividing line between Main Street and Wall Street. The reality is, we have our own main streets here in New York City – in all five boroughs. There’s a Main Street in Flushing, there’s a Main Street on the South Shore of Staten Island, there’s a Main Street in Edgewater in the Bronx. There’s a Main Street in Brooklyn and on Roosevelt Island. There are main streets in every neighborhood across our city, and to one extent or another, they all depend on Wall Street’s success. As the President said, the success of Wall Street and Main Street in our city – and in our nation – the success of both of them are inextricably linked; one supports the other.
“The financial services industry is made up of people who live and work in our neighborhoods and who shop on our main streets. So if regulation and higher taxes lead to fewer jobs on Wall Street, that will mean fewer jobs for middle class communities across the country.
“My concern is for the police officers and firefighters, teachers and sanitation workers, and everyone else who lives in our neighborhoods, shops on our main streets, and keeps our City strong. They get paid by the taxes that the financial industry generates.
“We need to reform banking regulations so that investors – including Wall Street banks – can assess the risks and value of derivatives. Establishing a public exchange for trading derivatives I think would improve the transparency and stability of the market. It’s critically important that we don’t prohibit companies for employing the most modern and creative techniques for growing our economy and our housing supply. An open public exchange would enhance America’s competitiveness in the market and bring more jobs here from London and Tokyo and around the world.
“For me, transparency is not just something I support – I’ve lived it. I spent part of my first career at Salomon Brothers, and all of my second career as an entrepreneur, finding ways to build transparency of information and markets.
“Now there are other elements being discussed in Washington that would be steps in the right direction as well. I absolutely agree with the President that we need stronger consumer protection in the financial services industry. In our City, we have very robust consumer protections – many of which we have enhanced over the last eight years while I’ve been in office – and they work very well.
“Giving one agency – instead of the current seven agencies in Washington – the job of protecting consumers would strengthen enforcement and accountability. In the same way that the proposals would move consumer regulations under one roof, and as we are trying to do in our City, we need regulatory agencies that are based on business practices, not industry structures. Investment banks and commercial banks and insurance companies and hedge funds are in different industries, but they are all engaged in the same kind of business. However, currently they’re regulated by different agencies with different rules and have different state or congressional oversight.
“But some steps being discussed in Washington would move us backward. Making the President of the New York Federal Reserve a presidential appointee, rather than an appointee of the Fed’s board of governors, would politicize the job. And the last thing that we need at the New York Fed is partisan politics. And requiring entrepreneurs and early-stage businesses to file reports with the SEC that would impose compliance costs that would make it harder for them to succeed, stifling innovation and costing us jobs is not a great idea.
“Other proposals would also lead to job losses. Limiting the size of financial firms would lead companies to move jobs overseas. We already have anti-trust laws that deal with companies that may grow too powerful in the marketplace – and where applicable, those laws should be enforced. They are not always done so now.
“We need American regulations to be coordinated with international standards, or else foreign firms will find it too costly and too difficult to do business here, and our jobs will move overseas.
“Another regulation that would drive business overseas is the proposal to prohibit firms from engaging in proprietary trading. Banning it would not stop it, but only send those jobs to London or Geneva or Shanghai. Proprietary trading is one of the many profit centers that financial institutions use to make money, and they depend on those profits to carry them through unprofitable periods in the loan business. We all depend on access to loans to build houses and schools and hospitals and all businesses – small and large. Every industry needs access to capital – that’s the basis of our entire economy. If we limit banks’ ability to make money, we reduce the amount of lending they can do – and that will hurt all of us.
“The President is right: we need new regulations. They need to be smart regulations, consistent with international standards, supportive of access to capital, conducive to creating jobs, and good for every street in our country.”
Stu Loeser (212) 788-2958