Wall Street Is Not Doomed
January 30th, 2007

When last week, a report commissioned by Mayor Michael Bloomberg and U.S. Senator Charles Schumer, Sustaining New Yorks And The U.S.s Global Financial Services Leadership ,
warned that New York Citys position as the worlds financial capital was threatened, editorial response generally endorsed the view expressed by financial services executives interviewed for the report that part of the problem is a regulatory approach overly punitive and public” (explicitly referring to the Sarbanes Oxley Act, a law that cracked down on lax accounting practices in the wake of scandals like the Enron debacle.)

For example, Newsday ran an editorial arguing that excessively burdensome regulations that threaten its financial muscle should be addressed quickly, without undercutting necessary safeguards, to help New York City preserve its role as financial capital of the world.

But in the New Yorker Magazine, James Surowiecki calls the effect of regulation on Wall Streets pre-eminence as represented in the report a radically oversimplified explanation of whats been happening and maintains there is no evidence that Americas attractiveness to investors has diminished
“Theres no doubt that Sarbanes-Oxley is an imperfect piece of legislation, but it is not a harbinger of doom for Americas capital markets, and we should be skeptical of any analysis that says it is. Wall Street, after all, has greeted practically every important market regulation introduced in this century with howls of dismay and predictions of disaster. In 1934, the head of the New York Stock Exchange told Congress that if the Securities Exchange Act, which became the foundation of market regulation in the U.S., was made law there was a chance that stock trading in the U.S. would be entirely destroyed. Needless to say, it wasnt.

By on January 30, 2007, 9:15 am
In category: Gotham City,Public Finance | 1 Comment »

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One Response to “Wall Street Is Not Doomed”

    February 2nd, 2007 at 5:00 pm

    […] Republican greed and avarice know no bounds and, to be honest, Beltway Democrats are a bunch I don’t believe will go to the mat to protect us from either. Don’t you just know Max Baucus is shedding no tears over being “forced” to compromise with Republicans who just hate the idea of raising the minimum wage… unless they can get something for their already fat and pampered contributors– who just happen to by Baucus’ contributors too, not to mention contributors to lots of other Democratic insiders. Oh and it isn’t just a reactionary Dem like Baucus siding declaring his allegience to the Money Party; a contribution-obsessed “progressive” like Schumer is just as much a sell-out. […]

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