Eliot Spitzer, New York governor, is to form a top-level panel of Wall Street chief executives, lawyers, consumer groups and regulators to modernise financial services regulation in the state.
Chaired by Eric Dinallo, the New York insurance superintendent, the group will seek to keep New York competitive with London by streamlining and modernising regulation without sacrificing the state’s tradition of strong investor protection.
The focus will be to rationalise state regulation of insurance companies, state-chartered banks and securities dealers and perhaps serve as a model for other states and the federal government.
The project follows Mr Spitzer and Mr Dinallo’s success in rewriting New York’s workers compensation programme and efforts to settle the long dispute over insurance claims after the attack on the World Trade Center.
Mr Dinallo said: “I’m viewing this as the cleaning of the Augean stables. It’s always healthy for a regulatory regime to stop and re-examine itself in response to the needs and concerns of the regulated, while still protecting consumers and investors.”
The group will be established this week and will include the chief executives of Goldman Sachs, Citigroup, AIG and MetLife, and the heads of several New York-chartered banks and representatives of consumer and New York business groups. It will also include the four state agencies overseeing the industry.
One consideration will be whether to implement principles-based regulation along the lines of the UK’s Financial Services Authority.
Also on the panel are several of those who, with Mr Dinallo and Mr Spitzer, forged the $1.4bn (£706m) global settlement that rewrote the rules for stock analysts at 12 big investment banks.
Steve Cutler, then head of enforcement for the Securities and Exchange Commission and now general counsel of JPMorgan, will be a member, as will Ted Levine, who was chief negotiator for the investment firms. Andrew Cuomo, who succeeded Mr Spitzer as attorney-general, will be represented by Eric Corngold, a deputy attorney-general.
Participants said they hoped Mr Spitzer’s investor-protection work as attorney-general would give the group credibility among consumer advocates, which some of the business groups calling for regulatory reform lack.
