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Bloomberg: Wall Street "Crumbling" As Financial Leader

NYC Mayor Michael Bloomberg
NYC Mayor Michael Bloomberg

It's almost the end of the financial world as we know it-- in New York City. At least that's according to New York Mayor Michael Bloomberg (R) and Sen. Chuck Schumer (D-NY). Both men say NYC--and the U.S. for that matter-- are losing their competitive edge as leaders in financial dealings. Today--the politicos released a study done by the mayor's office and consultant group McKinsey that apparently proves the point. CNBC's Margaret Brennen had the details "Morning Call." (prior CNBC reports on this story with analyst interviews.)

At a press conference in NYC--Bloomberg said this: "Unless we take the corrective steps and soon, we are going to see America's leadership in global financial transactions dwindle putting a chill on the nation's economy and the city's that will spell fewer jobs and slower overall growth."

What the report says is that NYC and the U.S. are losing IPOs, hedge funds and other financial services to cities like London. London has seen an increase of .4% of its financial services work force while NYC has seen a drop of .7% in the last year. The main reason seems to be "over regulation."

Okay--here's what needs to be done according to the report: first, clarify regulations and rules (Sarbanes-Oxley--we'll have a post later on who really benefits and even likes the law) and even allow some businesses to opt out of certain rules. Second-restrict lawsuits against financial services and third--reform immigration laws to allow skilled workers into the U.S.

FYI--financial services in NYC create more than $60 billion a year in revenues. Other fact: the financial services and insurance industries employ over 333,000 people in New York City, totaling almost 11% of the City’s private sector employment and 5.5% of financial services employment nationwide (Source: NYS Bureau of Labor Statistics, February 2006).

More Fortune 500 financial services companies are headquartered in New York City than in any other U.S. city. The City is home to six major stock, commodities and futures exchanges, including the New York Stock Exchange, the world’s largest exchange marketplace for equities.

AND: according to the New York City Economic Developemnt Corporation, NYC is the center of international financial services with 119 financial services firms from 31 countries worldwide - representing six continents - having their offices in NYC.