New York Governor Eliot Spitzer has signed an executive order creating an adivisory panel to look at ways of reducing the regulatory burden in the state in a bid to regain New York's position as the world's leading financial centre.
The newly created New York State Commission to Modernize the Regulation of Financial Services includes Charles Prince, CEO of Citigroup; Lloyd Blankfein, Goldman Sachs’ chief executive; Stephen Cutler, JP Morgan Chase’s general counsel; and Diana Taylor, a managing director at investment firm Wolfensohn. The panel is chaired by New York’s superintendent of insurance, Eric Dinallo, and is set to issue a report by June 2008.
"This panel will help the state bring its regulatory structure into the 21st century, encouraging the use of cutting-edge technology and techniques to provide capital, insurance and other services to companies and individuals around the country and the globe," Spitzer said in a statement.
The move comes at a time when news agencies are reporting that for the first time since World War II bankers are on the verge of earning less from initial public offerings (IPO) on Wall Street than in Europe. And in January, a McKinsey report commissioned by New York Mayor Michael Bloomberg and senator Charles Schumer revealed 'a broad consensus' that New York has become less attractive than London as a financial centre over the last three years.
While this panel will address state regulation, politicians and regulators at many levels in the US are under pressure to address the cost of compliance with Sarbanes Oxley, and listing and accounting rules. Many banks are also keen on the idea of US financial regulators adopting principles-based regulation similar to that in the UK, though such a transition would be complex due to the overlap between state and federal regulation in the country.