A new report on the financial services sector since the market collapse in 2008 provides information that New York City may soon lose its standing as the world financial capital.
Approximately 20% of NYC’s economic output is generated by the financial services sector, equating to roughly $8 billion annually in city taxes and over 300,000 jobs, according to the report by Partnership for New York City and the Gerson Lerman Group. The sector is of danger of losing its standing to the growing competition of international financial hubs like London, Hong Kong and Singapore.
A survey of 50 banks, insurance and financial service companies, asset managers and real estate companies was included in the report’s data.
Other U.S. cities such as Phoenix, Dallas and San Antonio were also contributing to New York City’s decline in standing with strong job growth in the financial services industry, as detailed in the report entitled “At Risk: New York’s Future as the World Financial Capital.”
Factors like “regulatory environment” and “a punitive legal, tax and political environment (that) limits profitability, growth and innovation,” in the city, are cited within the report. The report then offers an array of unique suggestions aimed at maintaining and brightening the city’s standing. These include a reduction of commercial, patent and personal income taxes, investment in public transit and airport quality, affordable housing development, investment in digital infrastructure, and modifications to the current legal system by restoring the NYS Department of Financial Services to a regulatory role.
One Wall Street compliance officer, Nelson Gomez, said that part of the industry’s problem has been “hubris” from within, but local recruitment also suffers as a result of the “vilification” of finance professionals in famously liberal NYC. Gomez said, “There’s a lot of negative media concerning Wall Street.”
For more information please view the new report, “At Risk: New York’s Future Status as a World Financial Capital.”