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Standards & GuidanceNew York needs to change to remain top financial centre
Michael Bloomberg, mayor of New York, has delivered a stark warning that stringent regulation and high litigation risk is threatening the city’s status as a global financial market. Left unchecked, warned the joint reported released by Bloomberg and senator Charles Schumer, current trends could result in the US missing out on an annual $15bn to $30bn in financial services revenues by 2011.
The report added that while many of the causes of New York’s declining position are due to improved markets abroad, a significant number of causes are self-imposed: for instance, the country’s complex and sometimes unresponsive regulatory system is not only discouraging listings in the US, but forcing already-listed businesses overseas.
Bloomberg and Schumer joined with New York governor Eliot Spitzer to release a raft of measures intended to revitalise US markets. This includes recommendations to provide clearer guidance on the Sarbanes-Oxley legislation, reform securities litigation, develop a shared set of regulatory principles, and promote convergence of international accounting and auditing standards.
The editorial in the Financial Times (23 January) argued that while the report overstates the danger to New York, it represents an effective piece of lobbying in favour of reform. Improved regulation will benefit New York, said the FT, but as a spur to its growth, not a response to a serious decline of the city as a financial centre.
Nils Pratley in The Guardian suggested the timing of this report could not be better for the London Stock Exchange, which is attempting to fight off a hostile bid from Nasdaq by arguing the US exchange is a struggling business frantically trying to buy growth outside its own country.
LinksSustaining New York’s and the US’ Global Financial Services Leadership
February, 2007 |
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