Governor Paterson Calls on Paulson, Bernanke and Congress to Headquarter New Federal Asset Relief Program in New York
September 19, 2008
New York City in Best Position to Serve as Headquarters for New Federal Program
Governor Sends Letters to Treasury Secretary Paulson, Federal Reserve Chairman Bernanke and Congress Supporting Federal Program to Stabilize Financial Markets
Governor David A. Paterson today sent letters to Treasury Secretary Henry M. Paulson, Jr., Federal Reserve Chairman Ben Bernanke, Congressional leadership and ranking members of the Congressional Banking committees, calling for the newly created federal troubled asset relief program to be headquartered in New York City.
In his letters, Governor Paterson expressed appreciation for recent steps taken by Secretary Paulson and Chairman Bernanke to help stabilize financial markets and to restore public confidence, while additionally offering support for a new proposed federal government program. The Governor presented a rationale for why such a government program should be headquartered in New York City, including:
New York City’s ingrained depth of knowledge about the industry, assets and the markets is unmatched by any other metropolitan area. New York has a unique concentration of knowledgeable potential staffers and advisers who would be available to get the program off the ground quickly and professionally due to the many banks, investment banks, law firms and other service providers located in the city.
The proximity to the Federal Reserve Bank of New York, which has a key role in evaluating the systemic risks to our financial markets and institutions.
The program’s short-term goal of strengthening the private sector will be enhanced by being located in the nation's economic capital.
New York State and New York City have lost more jobs and revenue as a direct result of this crisis then any other Governmental entity. Headquartering the Agency here will create some new jobs for the financial sector and in some small way help mitigate the effects of this crisis.
The full text of the letter is presented below.
Dear Secretary Paulson and Chairman Bernanke:
I am writing to you concerning the important and creative actions you have proposed to help to stabilize our financial markets. As the global center for financial markets, New York understands the critical part that public confidence in our capital markets plays in the ability of those markets to function smoothly. Your actions to restore public confidence are greatly appreciated.
We all eagerly await the details of your proposed program to buy assets from financial institutions that are contributing to current market uncertainties. I strongly agree that a program to stabilize the financial markets must be a national priority. Therefore I urge quick Congressional consideration and action. As you plan for implementation of the program - whatever the final structure - I strongly urge that this effort be headquartered in New York City.
The keys to the success of the new program will be knowledge of the financial industry, the problem assets, and the markets into which they can be sold, including both the markets for residential and commercial real estate and the securitization market. No other city has the depth of knowledge about the industry, the assets and the markets as New York. As result of the many banks, investment banks, law firms and other service providers located here, New York has a unique and unsurpassed concentration of knowledgeable potential staffers and advisers who would be available to get the program off the ground quickly and professionally.
Another benefit to locating the program in New York would be the proximity to the Federal Reserve Bank of New York, which has a key role in evaluating the systemic risks to our financial markets and institutions. In addition, although the new program will be a governmental entity, I believe the public perception of the program as a short-term measure to strengthen the private sector will be enhanced if it is located in the nation's economic capital.
Finally, as you are aware, New York State and New York City have lost more jobs and revenues as a direct result of this crisis then any other governmental entities. Headquartering the program here will create some new jobs for the financial sector and in some small way help mitigate the effects of this crisis.
I and New York stand ready to help in any way to implement this important initiative; please do not hesitate to call upon me or my staff.
David A. Paterson