In an effort to stop businesses from fleeing New York, Mayor Bloomberg is meeting with international finance regulators about the idea of making the American regulatory system less burdensome.
Mr. Bloomberg yesterday met in London with the chairman of the Financial Services Authority, the umbrella regulatory body for the banking, securities, insurance, and investment industries in Britain.
The meeting came just weeks after Mr. Bloomberg and Senator Schumer released a report warning that New York will be replaced as the financial capital of the world if the federal government does not make changes to the regulatory environment.
The report painted the regulatory system in America as a "thicket of complicated and stifling rules," where businesses must comply with laws implemented by a hodgepodge of governing bodies.
Mr. Bloomberg has pointed to the FSA as a model for removing unnecessary regulatory hoops that drive away business. He also said that he and the chairman of the FSA, Sir Callum McCarthy, "have agreed to continue discussions that will aid in my and Senator Schumer's fight to revitalize U.S. financial markets."
"The FSA is an example of the kind of streamlined and responsive regulatory framework Congress must implement if New York City is going to remain the financial capital of the world," Mr. Bloomberg said in a statement.
Yesterday's stopover in London came as Mr. Bloomberg was wrapping up a trip to the Middle East and Ireland. That he has taken it upon himself to tackle a federal regulatory issue is yet another example of the national role he has carved out for himself in his second term.
The director of the program on international finance at Harvard Law School, Hal Scott, praised Mr. Bloomberg for thrusting himself into a leadership role. Mr. Scott is one of three leaders of the bipartisan Committee on Capital Markets Regulation, which issued its own report in November on America's slipping competitive position.
"If you're the mayor of the world's financial center, and you think you're losing it, you've got to do something about it," Mr. Scott said during a telephone interview.
Mr. Scott said a consolidated FSA-like system deserves a "serious look," but noted that he was not speaking on behalf of the committee because it did not delve into the issue.
"The head of the FSA really has to have by its nature the interest of the entire financial system at heart so it's not this sort of turf protection, or somewhat narrow perspective of what's important," Mr. Scott said. "I think it has a lot of appeal, but it deserves further study."
The idea of consolidating federal regulatory bodies is not a new one in America. In the past, the issue has been stymied because of turf wars between the U.S. Securities and Exchange Commission and other regulators.
The dean of Baruch College's School of Public Affairs, David Birdsell, said many New York mayors have used the city's muscle to push for policy change. He noted that Mr. Bloomberg is "advertising very loudly to the international community that this is a city that wants your business."
Republicans and Democrats have both been talking about easing parts of the Sarbanes-Oxley Act that Congress passed to prevent another Enron-like corporate fraud debacle. Messrs. Bloomberg and Schumer are calling for the federal government to offer exemptions to the law to small and foreign businesses.
Last week, President Bush said he would move to ease the environment of excessive litigation and to modify the implementation of Sarbanes-Oxley. He said Sarbanes-Oxley is just as important now as it always has been, but part of it "may be discouraging companies from listing on our stock exchange."
Mr. Bloomberg was in Ireland yesterday promoting new flights between West Ireland and New York ó a move he said would boost tourism here. He also announced a new $100,000 advertising campaign in and around Dublin to promote New York as a tourist destination.
Tourism, like finance, is an arena in which New York is locked in fierce international competition. The city's tourism and marketing organization, NYC & Company, opened an office in Dublin last year.