PDA

View Full Version : Wall St. disaster plan dropped



NYguy
January 3rd, 2003, 07:40 AM
Daily News...

Wall St. plan is doomed

By MAGGIE HABERMAN and GREG GITTRICH

Federal regulators are scrapping a doomsday plan for Wall Street that would have urged large financial firms to build backup facilities as far as 300 miles out of the city, Sen. Chuck Schumer said yesterday.

Top city business advocates and executives had attacked the contingency plan, saying it threatened to push thousands of jobs and billions of tax dollars out of the city.

Schumer (D-N.Y.) said he has now received assurances from the three federal agencies that drafted the plan that its recommendations would not be enforced.

"This is a big victory for keeping New York the financial capital of the world and for keeping jobs in New York," said Schumer, who battled the plan after the Daily News reported its existence in October.

The preliminary plan urged 15 to 20 major banks and five to 10 major securities firms - many of which base their operations in the city - to consider creating far-flung backup sites.

Drafted by the Federal Reserve Board, the Securities and Exchange Commission and the Office of the Controller of the Currency, the plan was billed as a way to protect the financial markets in case of another terror attack.

But it could have led to the loss of up to 25% of the city's 155,000 financial services jobs, business leaders said.

Mayor Bloomberg and Gov. Pataki also have criticized the recommendations.

"It's clear to me that what the regulators were saying ... months ago is not what they are saying now," Schumer said. "They have backed off. "This gives us a green light to say to all the financial institutions: Stay in New York."

Federal regulators declined to comment or did not respond to calls.

However, in a Dec. 23 letter to Schumer, the agencies argued that their plan, or white paper, has been portrayed inaccurately.

"The draft white paper recognizes that there is no one-size-fits-all solution," the letter said, adding that the agencies will maintain a "flexible approach" to protecting the financial markets.

NYguy
January 3rd, 2003, 07:42 AM
NY Post...

FEDS NIX PLAN FOR WALL ST. ‘BACKUPS' IN STIX

By TOM TOPOUSIS

January 3, 2003 -- The feds have eased off their controversial plan to force Wall Street to create backup trading floors hundreds of miles from downtown, Sen. Charles Schumer said yesterday.

In a letter to Schumer, top officials from the Federal Reserve Board and other agencies insisted they would not urge key financial firms to relocate outside the city - which could suck 15,000 jobs out of downtown Manhattan after the 9/11 attacks.

"This is clearly a great victory for us," said Schumer, predicting that it would save the city thousands of jobs. "It is clear to me that they have changed their tone."

In August, the federal regulators issued a draft plan to protect the nation's financial markets from another terror strike by setting up backup facilities far from Manhattan's trading floors and clearinghouses.

Although the draft proposal did not set a minimum distance from the city, it did raise the possibility of a 200- to 300-mile buffer between backup facilities and the main financial operations downtown.

The plan was denounced by Schumer and other New York officials, who demanded that it be scrapped.

Several firms have already started moving operations from the city.

Morgan Stanley has shifted 150 jobs to Baltimore. J.P. Morgan is scouting office space in Florida. Merrill Lynch already had its clearing operations in New Jersey.

Estimates of the potential job loss have hovered around 15,000.

In their letter to Schumer, the regulators, including Federal Reserve Chairman Alan Greenspan, said their intention was never to pressure firms to abandon downtown.

"The draft . . . does not recommend as a sound practice that firms move out of center-city locations," the feds' letter said. "Nor does it set specific minimum distance requirements for backup operations . . ."

The draft plan "recognizes that there is no one-size-fits-all solution to the backup and recovery needs of the nation's major financial firms, which frequently includes operations in or near Manhattan," the letter added.

A spokesman for Mayor Bloomberg declined comment on the letter to Schumer, but said the administration welcomed any change that would boost the economic vitality of lower Manhattan.

Fabb
January 3rd, 2003, 08:09 AM
OK.
They're coming to their senses.

TLOZ Link5
January 3rd, 2003, 12:25 PM
OK, so we've made sure that firms aren't being forced out of downtown.

Now we need to make sure that they stay downtown.

Agglomeration
January 3rd, 2003, 03:32 PM
There are still some firms thinking about moving out of Lower Manhattan, and even out of the city altogether. That means they may consider moving out of Mid Manhattan, downtown Brooklyn, and Jersey City. It will be a delicate balancing act to keep them here for months to come. I'm grateful that today's businesses don't judge a city simply by its office space prices.

NYguy
January 3rd, 2003, 05:14 PM
Quote: from Agglomeration on 3:32 pm on Jan. 3, 2003
There are still some firms thinking about moving out of Lower Manhattan, and even out of the city altogether. That means they may consider moving out of Mid Manhattan, downtown Brooklyn, and Jersey City. It will be a delicate balancing act to keep them here for months to come. I'm grateful that today's businesses don't judge a city simply by its office space prices.

That's not really the problem it was a few years ago. *Now Jersey if facing problems with too much office space. *The high vacancy rate in Manhattan also allows for more options, and many companies are deciding to stay put. *When the market becomes tight again, probably in a few years, will be the time to be concerned. *But there are already developments in the works to ensure that won't be a problem.

TLOZ Link5
January 4th, 2003, 07:05 PM
Not to mention the fact that vacancies are much worse throughout the rest of the country. *The Times had an article on trophy buildings in the Real Estate section, and comparative vacancy rates in New York and "other cities" came up as a side note.

Kris
January 5th, 2003, 06:04 AM
The article in question: http://www.nytimes.com/2003/01/05/realestate/05COV.html

TLOZ Link5
January 5th, 2003, 01:04 PM
Thanks, Christian.