News From Governor Paterson - Week of 9/22/2008
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Governor Paterson Calls for more Supplies to Aid Haitian Relief
Governor David A. Paterson today thanked
the hundreds of New Yorkers who have donated critical supplies for the
island nation of Haiti, following the devastating hurricanes that tore
through the region during the last four weeks. To date, 74 pallets of
supplies have been collected at the Bedford Armory in Brooklyn, which
the Governor directed be opened and staffed by the National Guard to
aid in the collection. Among supplies collected thus far, food items
total 6,323 and cases of water total 340.
The Army National Guard facility at 1579
Bedford Avenue at Union Street in Brooklyn will remain open all this
week through Sunday afternoon. In addition, the State is accepting
donated items at the Adam Clayton Powell State Office building at 163
West 125th at Adam Clayton Powell Jr. Blvd in Harlem, and in the Bronx
at Cox Nissan, 1235 East Tremont Avenue, between 9 a.m. and 5 p.m.,
until Sunday evening.
Three hurricanes in four weeks have left
more than 100 dead and tens of thousands homeless in Haiti. Hunger and
dehydration are rampant, and Governor Paterson last week issued a call
to action to New Yorkers to help collect supplies.
“New Yorkers always come together in a
time of crisis to help strangers in other states and nations. I am
proud that this time is no exception – this is truly an incredible
response,” said Governor Paterson. “When Hurricane Gustav hit
Louisiana, New York sent help. When Hurricane Ike hit Texas, New York
sent help. These same storms have hit Haiti, and New York will send
help. We must act now to get vulnerable people essential supplies. The
damage inflicted on Haiti by these hurricanes was severe, for the more
than 125,000 Haitians living in New York, this affected their families
and neighbors. The damage has been compounded by the fact that Haiti
was already one of the poorest nations in the world – according to the
UN, 53 percent of the population lives on less than a dollar a day. A
bottle of water or a package of rice will make a real difference.”
Soldiers from the New York National Guard
will remain on-hand through Sunday afternoon to receive, sort and
prepare for shipment of donated items for the citizens of Haiti. Items
in high demand for shipment to Haiti include:
- Rice (Dried in bags);
- Beans (Dried only and Cans);
- Sterno canister;
- Tarpaulin – of any size, preferably 10X10 or larger. It is used for both roofing and flooring;
- Nylon cord (100’ rolls);
- Hygiene items limited to toothbrushes, toothpaste, mild soaps;
- New underclothes – children sizes;
- New hand towels.
Governor Paterson added: “We are continuing to accept donations at three locations though the end of this weekend and I would like to extend a special thanks to the following individuals for their tremendous contributions with this effort: Senator Hillary Clinton, Congressman Edolphus Towns, Congresswoman Yvette Clarke, Congressman Joseph Crowley, Public Advocate Betsy Gotbaum, City Comptroller Bill Thompson, City Council Speaker Christine Quinn, State Senator Bill Perkins, Assembly Member Nick Perry, Manhattan Borough President Scott Stringer, Brooklyn Borough President Marty Markowitz, Council Member Eugene Mathieu, Council Member Darlene Mealy, Council Member Robert Jackson, Council Member Larry Seabrook and the Brooklyn Chamber of Commerce.”
U.S. Representative Edolphus “Ed” Towns said: “Right now, the situation in Haiti is dire. With the great number of Haitian families in my district who have relatives, friends and loved ones who may be suffering as result of Hurricane Ike, I stand with Governor Paterson and my colleagues in Congress to address this urgent matter. People are hungry. Communities are under water, and the human spirit is heavy in Haiti as many struggle to overcome the widespread devastation. I am prepared to support this effort personally and encourage each and every resident in Brooklyn to do so. Our sisters and brothers in Haiti need our help now, and we must respond.”
U.S. Congresswoman Yvette D. Clarke said: “About two weeks ago I toured Haiti and saw for myself many of the areas that were hardest hit by the recent storms. The needs are compounding daily and we must act now. This is why I have joined my colleagues in Washington in signing on to a letter requesting at least $300 million in emergency appropriations in disaster assistance for Haiti. I commend Governor Paterson for his leadership regarding relief efforts from the people of New York to our sisters and brothers in Haiti.”
U.S. Congressman Joseph Crowley said: “The people of Haiti have suffered incredibly this year, from food riots to the devastation caused by four hurricanes and numerous other tropical storms. New Yorkers know first-hand that during times of crisis we must come together. I am proud to be a part of the efforts to provide support to Haiti, and I extend my deepest sympathies to the hundreds of thousands of Haitians living in New York who have been effected by the recent devastation. However, more must be done to ensure our neighbor has the food and resources it needs to survive these troubled times. That is why I will continue to work in Congress to secure additional support for Haiti.
New York City Comptroller William C. Thompson, Jr. said: “One of the things I am most proud to say about New Yorkers is that we always come through to help those who are in need. Even in these tough fiscal times, when New Yorkers are struggling to make ends meet and put food on our own tables, we still reach into our hearts and our pockets to help those that are suffering even more than we are.”
City Council Speaker Christine C. Quinn said: “I commend Governor Paterson for taking the lead in the effort to open our National Guard Armory for Haitian relief efforts. New Yorkers have always come together to help those in need, especially those who have suffered a devastating loss from a natural disaster. By providing the Armory as one streamlined central location, New Yorkers will now be able bring much needed items that will help the people of Haiti move forward after these devastating storms.”
Manhattan Borough President Scott Stringer said: “The pictures from Haiti of the storm’s devastation broke our hearts. New York City is home to one of the world’s largest Haitian communities, and we must stand in solidarity with Haiti in its hour of need. I applaud Governor Paterson’s efforts.”Brooklyn Borough President Marty Markowitz said: “Brooklyn is the ‘Caribbean Capital of America’ – by some counts, we have the largest Haitian population in the United States – and our hearts go out to our Haitian brothers and sisters in need. Brooklyn and Haiti share the common motto ‘In Unity There is Strength,’ and Brooklynites have been united once again in opening up their hearts, wallets and pantries to the victims of these storms. I commend Governor Paterson for working with New York’s strong and vibrant Haitian community and making humanitarian relief in Haiti a priority.”
New York City Councilman Mathieu Eugene said: “The Haitian community has been extremely fortunate to receive not only kind words but also substantive assistance from many friends, such as Governor Paterson, Senator Clinton, Senator Schumer and my long time friend Representative Clarke. Let me commend Representative Waters, Representative Weiner; the Congressional Black Caucus under the leadership of Representative Kilpatrick; and Representative Meeks for leading the emergency congressional delegation to survey the damage in Haiti. I would also like to thank Representative Rangel for his ongoing commitment and support to Haiti, all the members of the U.S. Congress, the State Representatives in New York and my colleagues in the New York City Council, who have worked tirelessly in this effort.”
Wyclef Jean said: “The impact of the food crisis coupled with the recent storm and hurricane catastrophe has resulted in a human tragedy of epic proportions in my native country of Haiti. My organization, Yéle Haiti, is on the ground delivering food, water, medical supplies, tents, clothing and other necessities to aid flood victims. With the help of programs like the one that Governor Paterson has created in New York, we can help get important supplies to the people of Haiti who are so desperately in need of them now. Equally important going forward is the need to support a long-term recovery that balances food distribution and school meals with job creation, tree planting and the expansion of agriculture.”
Donations will be accepted at the following locations:
Bedford Armory
1579 Bedford Avenue at Union Street, Brooklyn
Sept. 18 – Sept. 28, 8 a.m. to 5 p.m.
Adam Clayton Powell State Office Building
163 West 125th at Adam Clayton Powell Jr. Blvd., Harlem
Sept. 18 – Sept. 28, 8 a.m. to 5 p.m.
Cox Nissan
1235 East Tremont Avenue, Bronx
Sept. 21 – Sept. 28, 9 a.m. to 5 p.m.
For more information, please email relief@chamber.state.ny.us or call (212) 681-4010.
Statement From Governor David A. Paterson on Credit Default Market
“Today, during his testimony to the Senate
Banking Committee, SEC Chairman Christopher Cox joined my call for the
federal government to regulate the approximately $60 trillion credit
default market. Chairman Cox and I agree that this action is paramount
if we are to stabilize this market.
“As I have said, the absence of regulatory
oversight is the principle cause of the Wall Street meltdown we are
currently witnessing. This is why New York took the crucial next step
of planning to regulate an area of the market which had previously
lacked appropriate oversight, but that is indisputably as regulatable
as insurance. Additionally, the New York State Banking Department is
working with the Federal Reserve Bank of New York to help create a
central clearing facility for credit default swap’s that will help
address counter party risk and establish margin requirements. I
strongly encourage the federal government to follow our approach and
bring stronger regulatory oversight to these markets. New York stands
ready to work expeditiously with all concerned to find a workable
solution to this problem.”
Governor Paterson Announces Partnership Between MTA and google to Help Customers Navigate Transit System
“Google Maps for Transit is a truly innovative marriage of information and infrastructure. It is a perfect example of how the public and private sectors can partner together to benefit us all – and it didn’t cost New York taxpayers a penny,” said Governor Paterson. “I applaud my colleagues at the MTA and Port Authority for making this a priority, and our friends at Google for continuing to make the world an easier place to navigate.”
MTA Chairman H. Dale Hemmerdinger said: “At a time when the MTA is facing mounting fiscal challenges, we are thrilled to be able to offer this service to our customers at no cost to taxpayers. Google Transit will encourage ridership and underscores the importance of the MTA to the region’s economy and environment.”
MTA Executive Director and Chief Executive Officer Elliot G. Sander said: “The MTA is delighted to partner with Google to provide our customers with this cutting-edge tool for getting around our 5,000 square-mile territory. Customer service is a top priority, and this is just the latest example of how the MTA is pursuing innovative ideas to serve our riders.”
Port Authority of NY/NJ Executive Director Christopher O. Ward said: “Our challenge at the Port Authority is to move people faster and more efficiently. Google’s new technology will help us meet that challenge by giving travelers better information so they can move from JFK to any point in the city as seamlessly as possible.”
New York City Deputy Mayor Edward Skyler said: “We are excited to welcome Google Maps for Transit to New York City. One of the keys to increasing mass transit usage is making it easier for people to understand how to use the system. This partnership between Google and the MTA does exactly that. It harnesses the power of Google’s innovative search technologies to allow residents and visitors to more easily understand how mass transit will get them to where they need to go.”
John Hanke, Director of Google Maps & Earth, said: “We are extremely pleased to join forces with the MTA to provide information about their vast transit system in Google Maps. By being able to access station and schedule data for the largest public transit system in the United States via Google Maps, users are exposed to the availability and convenience of public transportation and are better equipped to take advantage of all that the New York metropolitan region has to offer.”
The program provides users with more valuable trip information; generates useful local information from Google Maps; and creates opportunities for MTA to reach out to car commuters who may not realize the availability, cost-effectiveness and convenience of public transit. Key benefits of Google Transit trip planner include:
- next scheduled departures from the station or stop
- search of nearby businesses, restaurants, attractions, and amenities (e.g. “delicatessens near City Hall Station”)
- “My Location” feature triangulates the user’s approximate cell-phone position on Google Maps for mobile and indicates distance from the destination
- Still photo entries for popular destinations
- Icons for Wikipedia entries for places of interest at stations
- Trip planning also accessible via many portable devices
- A link on the Google Transit page will take visitors back to www.mta.info to access additional MTA information each time MTA data is shown on Google Maps
Google, Google Maps, and Google Transit are registered trademarks of Google Inc.
Governor Paterson Announces Plan to Limit Harm to Markets From Damaging Speculation
Governor David A. Paterson today announced that New York State will, beginning in January, regulate part of the credit default swap market which has to date been unregulated and has been a major contributor to the emerging financial crisis on Wall Street. Governor Paterson also called on the federal government to regulate the rest of the massive $62 trillion market.
This action is similar to one recently taken by the federal government that tightly restricts “short selling,” or profiting from falling stock prices. The state action applies to credit default swaps which are a means of profiting from falling values of bonds. Under the direction of Governor Paterson, the New York Insurance Department today issued new guidelines that, for the first time, establish that some credit swaps are insurance and therefore subject to state regulation.
“The absence of regulatory oversight is the principle cause of the Wall Street meltdown we are currently witnessing. While I applaud the recent federal intervention to stabilize the market – and thus our entire economy – it is important we also take the next step as a nation by regulating areas of the market which have previously lacked appropriate oversight,” said Governor Paterson. “Earlier this year, New York was the first state in the nation to mandate certain regulatory control of the subprime lending market, and today’s action is just the next step. I urge the federal government to follow New York’s lead once again by regulating the rest of the credit default swap market, which will have a positive impact on our collective efforts to get the national economy back on track.”
Eric Dinallo, New York State Insurance Superintendent, said: “The severity of this crisis was substantially increased by what the government chose not to regulate, principally credit default swaps. This is primarily a credit crisis, not an equity crisis, and that is where the focus should be now. What New York State is doing fits our role as insurance regulators. We are providing an appropriate way for those with an insurable interest to protect themselves and we are going to ensure that whoever sells them that protection is solvent, in other words, can actually pay the claims. There is currently no such protection for policyholders. However, we are not regulating naked credit default swaps.”
The primary goal of insurance regulation is to protect policyholders by ensuring that providers of insurance are solvent and able to pay claims on policies they issue. The goal of regulating these swaps is not to stop sensible economic transactions, but to ensure that sellers have sufficient capital and risk management policies in place to protect the buyers, who are in effect policyholders. At AIG, for example, insurance companies regulated by the state are required to hold substantial reserves and as a result those companies are solvent and able to pay claims. However, a major part of AIG’s problems were created when credit default swaps were issued by a non-insurance unit that did not hold sufficient reserves.
A credit default swap is similar to a short sale of a stock. In both cases, an investor profits when the value of the security, either a bond or a stock, declines. As part of efforts to contain the current financial crisis, the federal government has temporarily limited some short sales of some stock to prevent destructive speculation that was damaging the health of targeted companies.
Credit default swaps played a major role in the financial problems at AIG, Bear Stearns and the bond insurance companies. A credit default swap is a contract under which the seller promises to pay the buyer if the insurance provider of the bond cannot pay principal and interest. Credit default swaps can be used by the owners of bonds who want to protect themselves if the company that issued the bonds is unable to pay interest and principal. In those cases, the swap is insurance, because the swap buyer is like a homeowner insuring a home. But, just as with short selling of stock, most swaps are now used by speculators who do not own the bonds and the value of swaps outstanding are generally much more than the value of a company’s debt. Swaps bought by speculators are known as “naked swaps” because the swap purchasers do not own the underlying bond. Speculation in a company’s bonds can under some circumstances hurt that company’s ability to borrow.
The new guidelines establish that when the buyer owns the underlying security on which he is buying protection then the swap is an insurance contract. Under these new regulations, such swaps would be subject to regulation for the first time and can thus only be issued by entities licensed to conduct insurance business. So called “naked swaps” are not insurance and cannot be regulated by the State.
The Insurance Department today issued Circular Letter No. 19 (2008), which sets forth best practices for financial guarantee insurers, also known as bond insurance companies or monolines. In the fall of 2007, the Department developed a three-part plan to address the serious challenges recently faced by the financial guarantee industry. Under that plan, the Department has:
1. Encouraged the entry of additional, well-capitalized insurers into the financial guarantee market and facilitated capital raising by existing insurers.
2. Protected policyholders and the public by helping financially distressed bond insurers to develop workable solutions.
3. Developed new standards to which the financial guarantee business should adhere.
Today’s circular letter is part of developing the third point, new standards. The Department will continue to encourage new players to enter the financial guarantee industry to ensure a healthy competitive market for those who need these products.
The new best practices:
1. Strictly limit financial guarantee insurers from guaranteeing collateralized debt obligations or “CDOs”—securities based on the payments from many mortgages. These CDOs, often based on subprime mortgages, have caused substantial financial difficulties for many commercial and investment banks. Credit default swaps on CDOs are the source of a large part of AIG’s financial troubles.
2. Institute a number of measures to limit risks for financial guarantee insurers. For example, the rules better define concentration risk, which is the risk from insuring too many bonds from a single source. The new rules include originators and servicers of debt as sources to consider.
3. Require written risk control and underwriting policies.
4. Increase the minimum amount of capital and reserves a financial guarantee insurer must maintain.
5. Expand reporting requirements.
Circular letters provide regulated insurance companies with direction from the Insurance Department. The Department also plans to propose regulations and legislation to implement reforms. The Department is prepared to answer questions and provide guidance about its views with regard to complicated credit default swap issues.
The new guidelines will not affect any existing credit default swaps. Financial guarantee companies were very active in selling credit default swaps, but are conducting little if any business currently. The new guideline provides a means for current and new companies to more prudently provide this type of insurance.
To avoid market disruptions, the guidelines as regards to credit default swaps will not take effect until January 1, 2009.
New York regulates most of the nation’s financial guarantee companies and Article 69 of the New York Insurance Law, which governs financial guarantee insurance, generally serves as the model for the laws governing financial guarantee insurance in other states. In 2000, the Department ruled that all credit default swaps were not insurance. Today’s circular letter effectively reverses that decision only to the extent that certain swaps are insurance under New York Insurance Law.
