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FOR IMMEDIATE RELEASE: January 5, 2003

ITS FUTURE IN QUESTION, POLITICAL, BUSINESS, AND LABOR LEADERS RALLY TO KEEP NYSE THE NUMBER ONE EQUITIES EXCHANGE IN THE WORLD

Bloomberg, Spitzer, Hevesi, Silver, Thompson, REBNY, ABNY, Alliance for Downtown New York, New York City Partnership and New York City Central Labor Council join Schumer to affirm that reform must occur for the New York Stock Exchange's own good – but can't undermine exchange's pre-eminence

Many competing financial interests are out to undo the NYSE – tens of thousands of New York jobs could be at stake if reforms are done the wrong way

US Senator Charles E. Schumer was joined today by political leaders including New York City Mayor Michael R. Bloomberg, New York State Attorney General Eliot Spitzer, New York State Comptroller Alan G. Hevesi, New York State Assembly Speaker Sheldon Silver and New York City Comptroller William C. Thompson, Jr. in support of reforming the New York Stock Exchange to ensure that it remains the number-one equities exchange in the world. Schumer was also joined by New York City Central Labor Council President Brian McLaughlin and business leaders including Dr. Henry McKinnell - Chairman and Chief Executive Officer of Pfizer, Robert Catell – Chairman and CEO of KeySpan Energy, Eugene Mc Grath - Chairman, President and CEO of ConEd, Thomas Renyi - Chairman and CEO of The Bank of New York, Steven Spinola - President of the Real Estate Board of New York, Kathy Wylde – Chief Executive Officer of the New York City Partnership, Carl Weisbrod – President of the Alliance for Downtown New York, and Michelle Adams – Executive Director of the Association for a Better New York.

The leaders affirmed that reform must occur for the New York Stock Exchange's own good, but that reform cannot in any way undermine its preeminence. With competing financial interests out to undermine the Exchange, Schumer and the others said that tens of thousands of New York jobs could be at risk if the needed reforms are done in the wrong way.

The following is Senator Schumer's remarks on reform at the New York Stock Exchange:

Good morning. I want to thank everyone who is here today, and I want to acknowledge two people who were not able to be here today. First, my friend and colleague Senator Hillary Clinton. We've spoken about the importance of the NYSE so many times, and while she could not stand with us today in person, she stands firmly with us in spirit and in commitment to preserving the NYSE as the premier equities exchange in the world. And Governor George Pataki – who also could not join us today. The Governor and the Mayor laid the groundwork, literally, for today's event in November, when they announced a new vision to maintain and even improve the security of the Wall Street area while improving the street scape around the New York Stock Exchange. At that time, the Governor said "The New York Stock Exchange is the heart and soul of Lower Manhattan – the nexus of the Financial Capital of the World." I don't think any of us here could agree more.

But in addition to needing a physical refurbishment, I think we all know that Wall Street needs an institutional refurbishment, and that's why we are here today.

The New York Stock Exchange is vital to New York's future. It employs thousands and creates tens of thousands of ancillary jobs. The fifteen hundred NYSE employees and three-thousand-plus trading floor personnel are just the beginning. I think we all know that so many business in Lower Manhattan and thousands more across the region owe at least part of their revenue to the financial services associated with the NYSE.

The NYSE is vital to the recovery of New York's downtown. More than any other institution, its presence helps make New York City the Financial Capital of the World. If you take away the NYSE, New York could well lose its centrality as the Financial Capital of the World. One could not even think of a greater blow to New York's economy than the demise – or even the diminution – of the NYSE.

It is not a certainty that the NYSE will stay here forever. History is replete with examples of exchanges losing their edge and vanishing within a short period of time. For much of the 19th century, the New Orleans Cotton Exchange was America's premier cotton trading market. But when new communications innovations enabled an upstart site in New York to offer better prices, New Orleans found itself under siege. Within a few years, all the trading on the New Orleans market had shifted to New York, and New Orleans was never able to recover.

So today the New York Stock exchange NYSE is the world's largest equities market; with more than 2,700 listed companies, with a total global market capitalization of more than $16 trillion, with almost $50 billion changing hands each trading day, and with an average daily volume of 1.4 billion shares, But just like it was not always this way, it might not always be this way.

There are two issues swirling about the exchange. One is reform. Reform relates to the governance of the exchange and to issues of enforcement, how the board should be structured, how brokers should be disciplined and how executives should be paid. The other is structure. Structure relates to how stocks should be traded; how much should be done electronically and how much should be handled by humans (specialists). Reform and structure are often confused.

Reform is clearly warranted at the exchange. There clearly have been excesses and these must be corrected. Some of us think the changes that are in the process of being made thus far should be tried before moving further along, others of us think more change is needed now. But we agree that reform must occur for the exchange's own good. And every wrongdoer should be punished, and rules and governance must change to make sure they don't happen again.

But we must not throw out the baby with the bathwater. In the zeal to reform the exchange we must not undermine its role as the deepest, most liquid and most transparent market for equity trading in the world. There are many institutional competitors within the financial services industry who are using reform to undermine the existence of the stock exchange itself. And the Frankfort and the London Exchanges would each be all to happy to take the mantle of number-one-in-the-world away from New York Stock Exchange.

Changes in the structure of how stocks are traded (as opposed to reform) will also have to occur to keep the exchange preeminent, but those should proceed carefully and slowly to avoid fragmentation of the markets and to avoid elimination of the exchange.

We have faith that the new team of Reed and Thain will address this issue carefully and thoroughly. They should not be pushed into wrong and untenable solutions by those who seek the replacement of the exchange with something else. And speaking of John Reed and John Thain, I should note that this event was planned independent of the NYSE - they weren't even informed until the weekend, by which time the event had been fully set-up.

In conclusion, we are here united to stand behind keeping the NYSE the preeminent equity trading exchange in the world. We may disagree on the details of reform and even on the details of structure, but every one of us stands here to say that we will do everything we can to keep the NYSE as number one equities exchange in the world. Thank you.

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