FOR IMMEDIATE RELEASE: October 23, 2002

SCHUMER SAYS WALL STREET EMERGENCY PLAN IS A NON-STARTER, TELLS FEDS TO REDO IT

Schumer tells SEC, Fed Reserve to scrap emergency plan that would move NY's financial firms outside city in event of another attack, tells them to develop new plan

Schumer wants to meet with Greenspan, Pitt, others to come up with new plan that would ensure that New York firms stay in New York in the event of an attack

Calling the proposed emergency disaster plan for Wall Street a non-starter, US Senator Chuck Schumer today urged top federal financial officials to scrap the proposal and come up with a new plan that would keep New York financial firms in the city. The proposed plan asks major Wall Street firms to shift their back-office operations outside the Metropolitan area in the event fo another terrorist attack. Schumer said the plan could end up costing New York thousands of Wall Street jobs.

"At a time when New York is scrambling to keep businesses downtown in the wake of 9/11, it's shocking that the federal government is devising a plan that would actually move businesses out of the city if there's another attack," said Schumer, who sits on the Senate Banking Committee which has oversight over federal financial agencies. "This is simply not going to fly and we need to stop this plan in its tracks."

Schumer sent an urgent letter today to Federal Reserve Chairmen Alan Greenspan and Vice Chairman Roger Ferguson, SEC Chairman Harvey Pitt and several other top federal banking officials in an effort to stop this plan and replace it with a new one that would be more sensitive to New York City's needs. Schumer was particularly irked that the Feds moved forward with this plan without gauging its impact on the local economy.

"Thousands of jobs have already been lost as a result of the September 11 attacks and the local government – highly dependent on Wall Street profits for its tax base – is being forced to make painful budget cuts in order to balance its books. Any further degradation of the Wall Street tax base is likely to push the City over the edge, severely impairing the quality of life of New York's 8 million residents," Schumer wrote. "In addition, the federal government has poured billions of dollars into downtown New York to help local businesses manage this economic trauma and start the rebuilding effort. Should Wall Street firms relocate facilities and personnel elsewhere, this recovery will be undermined, these tax dollars wasted and thousands more small business jobs put in jeopardy.

"For these reasons, I am very surprised that you did not consult with officials representing New York City to gauge how this plan would impact the city if it were put into action. While no one disputes the need for American financial markets to be able to continue functioning through any future terrorist incident, it would be a victory for the terrorists if this emergency plan inadvertently furthered the terrorists' goals of harming New York," Schumer wrote.

For a copy of Schumer's letter to Chairman Greenspan click here.
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