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City In Danger Of Losing Status As World Financial Center U.S. Senator Charles E. Schumer and New York City Mayor Michael Bloomberg this week 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 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. Schumer and Bloomberg, with the backing of Governor Spitzer, unveiled a sweeping plan to revitalize U.S. financial markets and reaffirm the city'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," 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 the mayor. "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." "The financial markets are a cornerstone of New York State's economy yet, as the study illustrates, we are in danger of losing our pre-eminence as the financial center of the world," said Spitzer. "We must take these recommendations seriously so as to support an economic climate ripe for financial services while continuing efforts to safeguard the market for investors. I applaud Senator Schumer and Mayor Bloomberg for their visionary leadership and look forward to working with them," he added. Schumer and 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. The report stipulated that while many of the causes are due to improved markets abroad and sophisticated technology that has virtually eliminated barriers to the flow of capital, a significant number of the causes for America's declining competitiveness are self-imposed. For instance, U.S.-based financial services firms are now unable to attract and retain many of the highly-skilled professionals they need because of caps on the number of visas available under U.S. immigration rules. The joint report offered several recommendations, derived from detailed analyses of market conditions here and abroad, informed by interviews with more than 50 respected leaders drawn from the financial services industry, consumer groups, and other stakeholders. 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. The mayor 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. 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. The joint report outlined a number of recommendations intended to improve America's financial services competitiveness for both the United States and New York. In its analysis, the 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.
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