McKinsey report: NY in danger of losing status as world financial centre

22 January 2007

US Senator Schumer and NYC Mayor Michael R. Bloomberg released a report undertaken by McKinsey & Company revealing that New York could lose its status as a global financial market without a major shift in public policy. Both 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.

The report named “Sustaining New York’s and the US’ Global Financial Services Leadership” proposes recommendations, intended for policy makers and all interested parties, that strive to ensure the future competitiveness of US and New York financial services. It report touches on a broad range of legal, regulatory, accounting, and other issues, but does not purport to provide a comprehensive macro-economic analysis nor a thorough consideration of every relevant issue.

Recommendations include among others to:

provide clearer guidance for implementing the Sarbanes-Oxley Act;

Implement securities litigation reform with particular short-term emphasis on leveraging the SEC's existing authority;

Develop a common vision and a supporting set of shared regulatory principles;

Recognize IFRS without reconciliation for listing purposes and promote convergence of accounting and auditing standards;

Protect US global competitiveness in implementing the Basel II Capital Accord;

Modernize financial services charters and holding company structures.

The recommendations should be viewed as a starting point for further reflection and debate.

Press release
Report

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