If You Ask Me: A Global Banker Reflects on Our Times

Wriston, Walter B.


The Road Back


I guess there's nothing that's more on everybody's mind in this room than the New York City financial crisis.[5]  Would you please comment on the current situation, as viewed from a banker's position.

The situation resulted from the way New York City is perceived by the marketplace, not the banks. That perception deteriorated to a point where the City could no longer sell its securities in the marketplace. The history is long and difficult, and everybody can take some share of the blame or some share of the credit.

What happened? The City lived beyond its means and financed itself in the marketplace until the market got glutted. Some taxpayers are voting with their feet. They're leaving this town, and they're leaving this state. The things that you have to do to get them back are the most politically unpopular in history.

You have to put a ceiling on tax rates and, in fact, lower them. If there is zero income tax in Connecticut, and a 14 percent tax here in New York, how long will people stay here? The answer is, not very long. We have to figure out a way to finance the City within the taxes it can collect.

The problems are enormous. It's said there are a million illegal aliens in this town. That certainly isn't the City's fault. But it's a problem that we've inherited. Every time somebody comes to the United Nations to explain that we're a police state, it costs the City a million dollars for police protection. There's no reimbursement from the federal government on that.

We've built up a staggering amount of expenses, and there just is not the tax base here anymore to handle it. The city has to cut back, or the payments have to be transferred to some other political jurisdiction. In the long run, the only way we're going to handle it is to regionalize the municipal tax base--that is, bring in the tax base of Nassau, Westchester and Suffolk counties, and others. That is precisely what they did in Nashville under similar circumstances They don't have as many zeros after their problem, but the problem is the same. They also did it in Atlanta. We have to figure out a way to expand the tax base and live within our means, so we can get the City back into the marketplace with a security that can be sold outside this city. That's what we're all involved in: the banks, the unions, the investment underwriters, the City, Big Mac[6]  and the Governor.


[5] This dialogue took place at the New School for Social Research in New York in January, 1977.

[6] The Municipal Assistance Corporation for the City of New York, a financing entity created by the New York State legislature in 1975 to help the City meet various operating expenses and debt repayments during the period when the City's own securities could not be marketed.

  • The document was created from a compilation of interviews and question and answer segments with Walter B. Wriston which was later compiled into "If You Ask Me: A Global Banker Reflects on Our Times" in 1980. The original speech is located in MS134.001.034.00018.
This object is in collection Subject Temporal Permanent URL
Component ID:
To Cite:
TARC Citation Guide    EndNote
Detailed Rights
View all images in this book
 Title Page
If You Ask Me: A Global Banker Reflects on Our Times
I: Getting Down to Fundamentals
The Big Cop-out
You Can't Go Bail for Everyone
Risk Is What It's All About
II: Some Basic Ills of the Body Politic
Lincoln Wouldn't Have Made It
Unpredictable Is a Dangerous Country
The Pitfalls of Single-issue Politics
Expect To Get Zapped
The Perils of Legal Pollution
The Injustice of Our Tax System
Those Wonderful People Who Bring You Inflation
Stop the Presses
Silly Premises Lead to Nutty Conclusions
Easier Said Than Done
III: New York, New York
New York City Is Alive And Well
The Road Back
IV: Careers
Rx for Happiness
Good Forward Planning
Dull Job?
A Simple Matter of Survival
Making It at Citibank
What Fast Track?
No Hiding Place
V: Once Around the World Quickly
South Africa
China: A Matter of Timing
The Real Significance of Iran
Iran and the Money Markets
Fashions in Country-criticizing
VI: The Global Financial Scene
The Elusive Eurodollar
De Facto Payments Mechanism
Too Big To Move
The Foreign Exchange Game
They Can't Leave the System
Baskets of Money
Swiss Francs
The Value of a Dollar
Not a Loss Since 1897
A Rational View of LDC Loans
Free Trade Benefits Consumers
The Destructive Costs of Regulation
The Big Rip-off
A Real Entitlement
Can Regulations Prevent Bum Loans?
The Insidious Side of Controls
Competition in Regulation
VIII: The Shape of Things To Come
Not As Big As You Think
What Lobby?
Armageddon Is Late, as Usual
Some Simple Facts about Interest Rates
An Expensive Luxury
How Big Is Big?
What We Did Yesterday Won't Work Tomorrow
A Matter of Semantics
Unpredictable Is a Dangerous Country
Privacy: A Serious Problem
The Unseen Revolution
Things Are Going To Be Different
Take the Handcuffs off Everybody
The Gray Areas of Lending
No Mouse under the Rug
Thank God We Don't Have National Banking
Competition Keeps You Awake
Accounting for Loan Losses
Not a Utility
People Like It
Computer Frauds
Some Final Words on Responsibility
About the Author