How Should the NY State Government Spend its $5 Billion Surplus from Wall Street Fines?

We have the results to our most recent Finger on the Pulse poll. Our FTF News editor, Eugene Grygo, recently posted a Minding the Gap column Can Good Come from the Sins of Wall Street?, where he discussed the fines imposed upon Wall Street and insurance firms for their sins during the Great Recession. Due to these fines, the New York State government has a $5.1 billion surplus for fiscal year 2016. New York Gov. Andrew Cuomo and other politicians in Albany are scrambling to sort out how to spend the windfall in the best way possible.

So we thought we would take it to our FTF News readers to see where they thought the money should go, and the result shows a solid standing, with 45% of the vote, for the surplus to be put towards improving the state’s rail service.  Do you agree?

surplus chart

 

 

With the recent winter storms in the Midwest and Northeast, we are now asking our readers to weigh-in on how firms manage these situations and what disaster recovery processes you have in place. Does your firm make you brave the ice and snow? Work from home? Snow day? Let us know at www.ftfnews.com.  We look forward to your feedback! (poll is on the bottom left side of our homepage)  

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FTF News Video: How to Build a Robust Op Risk System

CIT’s head of Op Risk discusses novel ways to improve surveillance and launch initiatives with FTF News editor, Eugene Grygo at the recent OpRisk New York 2014 conference in November.

Prasad Kodali, head of operational risk at CIT, is leading a program to integrate the processing of operational loss data into his Op Risk program. He shares his experiences with that project as well as his recommendations for a sturdy Op Risk project more generally.

Check out more FTF News videos online here.

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Can Good Come from the Sins of Wall Street?

Eugene-Grygo-03.29.12January 20, 2015

(Contribution from Minding the Gap, a blog by FTF News editor, Eugene Grygo.)

Thanks to the fines imposed upon Wall Street and insurance firms for their sins during the Great Recession, the New York State government has a $5.1 billion surplus for fiscal year 2016. New York Gov. Andrew Cuomo and other politicians in Albany are scrambling to sort out how to spend the windfall in the best way possible.

As the state capital reviews its options, many others are also chiming in.

New York City Comptroller Scott M. Stringer is arguing that NYC’s “fair share of New York State’s $5 billion budget surplus is $2.2 billion.” Stringer says that the state’s funding for New York City suffered a “dramatic decline … between 2009 and 2014.”

In addition, Stringer says that New York City “has helped the state weather many an economic downturn in the past. Now that we’ve turned the corner, it is time to do what’s fair. When Albany invests in the city’s infrastructure, education and essential services, it benefits all of New York.”

From another corner, The New York Times deigned to comment on a local issue and is arguing that the surplus be spent on: the state’s drinking water facilities and its wastewater infrastructure; the Metropolitan Transportation Authority because of a looming $15 billion deficit in its five-year capital plan; improving the state’s major roads in poor condition, with thousands of bridges requiring repairs; the purchase or protection of farmland, “especially in the upper Hudson region;” and a rainy day fund for “leaner times.”

Before I reveal my preferences for how the windfall should be spent, I asked my colleagues at Financial Technologies Forum (FTF) to put forth their suggestions.

Here are their preferences:

  • “I suggest exactly what Wall Street’s senior execs would, if they could: ‘Bonuses are down! Lay-offs are rampant! Big government is breathing down our necks! Give us back the damn money!’ ”
  • “Off the cuff, I think it should be invested in programs to help people struggling in the New York society, like developing more programs to help the homeless and working poor.”
  • “The $5 billion would go a long way to paying [school] districts back the money they are owed because of the infamous GEA [Gap Elimination Adjustment] and the state’s refusal to disburse the court-ordered foundation aid.”
  • “I’d say the money should be invested and the interest/dividends spent on public education, particularly subsidies to less well-off families for kindergarten and pre-K.”
  • “Maybe throw up a nice statue of Preet [Bharara, the U.S. Attorney for the Southern District of New York] and Benjamin Lawsky [New York State’s Superintendent of Financial Services] — preferably in the financial district. Maybe they could appear holding up the Scales of Justice together, standing atop a pile of money bags and the broken bodies of their adversaries.”
  • “Pay for some much needed reforms and repairs over at Rikers Island [Prison Complex].”
  • “I was taken aback that no percentage of the settlement would be going to education. It seems $160 million is going to NYC police officers for tablets (which seems a bit high) and not a penny is going to New York public schools that are still playing catch-up to the budget cuts and student programs that were cut due to the recession in 2008. So, my suggestion would be education programs.”
  • “Establish a small fund that could give grants to New Yorkers who have ideas for projects that would benefit the city in some way — community gardens, public works of art, things like that. And, perhaps, throw some sort of large aquatic beast in the big pond in Central Park just for kicks.”
  • “I say feed the homeless and elderly.”

As for my suggestions, I agree with The New York Times that some funds should be set aside to fix roads, bridges and other key components of the state’s infrastructure as they benefit all state residents.

I would also like to see a sizable sum set aside for Wall Street whistleblowers as an incentive to keep the big banks and other firms on their toes.

You can also join in the conversation by taking our quick “Finger on the Pulse” survey on the home page ofwww.ftfnews.com  If you scroll down, you can take part in the poll or contact me directly at[email protected]

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How to Retain and Promote Female Talent

Jessica_TitlebaumGuest Contributor:  Jessica Titlebaum, WILD Co-Founder

My mentor once said that results are not exclusive to gender.  While this is true, it’s also important to remember that gender may produce different results.   According to Catalyst, there is a correlation between women on boards and a company’s bottom line.  In this regard, it may be strategic to focus on retaining and promoting female talent.  Here are a few tips on how to successfully manage diversity in the office this year.

Recognizing the differences

There was a study done by the University of Chicago that looked at male and female candidates applying for jobs in Science, Technology, Engineering and Math (STEM.)  The study found that men tend to “inflate” their skills while women tend to underestimate their abilities.  If you think a female employee would be good at a certain job and she is not boasting her abilities, give her a short test related to the qualities needed and see how she ranks.  Recognizing that women may need a little more encouragement in the office can go a long way.

Initiating negotiation skills

Women might also benefit from strengthening their negotiating skills and talking about money. Condé Nast’s Glamour magazine recently surveyed 2,000 men and women on the topic of salaries.  Only 39% of women said they asked for a higher salary, when starting a new job, compared to 54% of their male counterparts.

Another study conducted by Citi and Linked In found that only 27% of women had asked for a raise in 2014 and of that number, 84% got the raise.   These numbers hint that some women are still unjustifiably uncomfortable talking about money.

To combat this, talk about these topics or send your female employee to a negotiation class or workshop.  Not only would it help her, but also it would help you when she is negotiating on your behalf or for the firm.

Build a network

Another suggestion is to get your female employee involved with industry activities.  This gives them the chance to build their network and identify role models and mentors.  Have you ever heard that saying, we are who our friends are? We tend to adjust to the people around us and a mentor’s behavior would rub off on your employee.  This might help with professional growth as well as your firm’s business development initiatives.

Conclusion

It’s important to show your female talent you support their professional development.  By recognizing their differences, addressing their needs and helping build their network, you could also be impacting your bottom line.

On a final note, I have learned that relationships are the most important thing to women.  Establishing and maintaining relationships is one way we navigate our career path.  Anyone that built us up, would be someone we kept alongside on the journey.

 

Sources:
Bussey, J. Gender Wage Gap Reflects the ‘Ask’ Gap (The Wall Street Journal, Oct. 10, 2014) Retrieved from http://www.wsj.com 

Zingales, Z.  Why Women Find It Harder to Get Math-Based Jobs (Chicago Booth Magazine, Fall 2014)

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Happy Holidays from FTF!

holidayCard

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FTF News Video: What Keeps Raymond James’ Cybersecurity Chief Up at Night?

Andy Zolper, senior vice president and chief IT security officer at Raymond James Financial, tells FTF News about the potential threats that keep him up at night. Focusing on the emerging best practices that enable firms to protect against cyber threats is helping Zolper and others cope.


Check out more FTF News video interviews online here.

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FTF News Video: Barclays Capital’s Tsandiotis on the State of Recs Automation

Roseann Tsandiotis, of Barclay’s Capital, speaks with FTF News, Eugene Grygo, about where the evolution of automation is at in Recs, and the tradeoffs firms need to consider before they commit to fully automating their Recs function.

Roseann recently was a panelist speaker at FTF’s ReCon New York conference.  Check out our upcoming ReCon London conference in 2015.

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