Seeking Friendlier Regulators

The Economist reports:

AN ANGRY New Yorker is not a pretty sight. Charles Schumer, a Democratic senator from New York, showed as much with his recent efforts in Congress to slap high tariffs on American imports from China. In the corner of Manhattan where sharp-elbowed commodity traders reign, Mr Schumer is better known for taking on another potential threat to local jobs.

In this instance, his wrath is focused on the IntercontinentalExchange (ICE), a fast-growing, all-electronic operation based in Atlanta, which earlier this year began to compete against the tradition-bound New York Mercantile Exchange (NYMEX) in oil futures. Mr Schumer is agitated about a perceived advantage for ICE that has broader implications for financial markets: the use of regulatory arbitrage. This is the idea that an exchange may operate in one jurisdiction rather than another so as to gain commercial advantage from more favourable regulation.

Chiefly for historical reasons—it bought the International Petroleum Exchange in London and used to have a trading floor there—ICE is still regulated by Britain's Financial Services Authority (FSA), which is perceived to have a lighter regulatory touch than American watchdogs. NYMEX is regulated by the Commodity Futures Trading Commission (CFTC), which has largely exempted ICE from its oversight.

We'll make an easy prediction:those New York exchanges will have less jobs.One of the reasons is regulation.New York City doesn't really want jobs, if they did they'd lower the costs of doing business in the city.