Regulatory pressures are taking a real toll on the securities industry, threatening to cost Wall Street up to 60,000 jobs over the next five years unless some kind of reform is enacted. Those are among the conclusions of a report by McKinsey & Co., commissioned by New York City Mayor Michael Bloomberg and Senator Charles Schumer.
In terms of dollars, the city could lose as much as $25 billion in cash flow unless reforms Bloomberg and Schumer propose are adopted, the report says.
According to media reports working from advanced copies of the study, McKinsey says New York and the U.S. are losing their leadership positions in the financial industry for three major reasins: Regulations here - particularly Sarbanes-Oxley - are more complicated than those enacted in the U.K. and other countries; the New York area is at risk of losing its shine as a place to live and work; and the U.S. legal system isn't as effective in discouraging "frivolous litigation" as are other systems.
The New York Post says Schumer and Bloomberg have proposed creating a new congressional panel that would watch over the financial services industry, streamlining Homeland Security measures so foreign workers can more easily obtain necessary visas, and establishing an international zone in New York that would allow companies to operate under a more favorable tax and regulatory environment.