Laid-off Wall Streeters encouraged to start companies

NEW YORK (Reuters) - Mayor Michael Bloomberg, an ex-trader on Wall Street who became a billionaire entrepreneur, on Wednesday offered new incentives to tens of thousands of laid-off Wall Street workers to become entrepreneurs themselves.

The mayor built on his mid-January proposal to lure companies to Lower Manhattan with $30 million of unused federal incentives granted after the September 11, 2001 attacks.

Under Bloomberg's new 11-point plan, would-be entrepreneurs can win a cash prize and a trip to the city by winning a competition for the best financial services business plan. They also can qualify for 250 grants of $20,000 to $250,000 from a new $3 million city fund.

Start-ups also will be able to lease offices at $200 per person for six months.

In addition to ex-Wall Streeters, insurers and commercial banks from China, India and other developing countries will be recruited, along with utilities. Exchanges would be encouraged to boost trading in new products, such as carbon credits.

For more details on the incentives, please see: www.nyc.gov.

Wall Street's capital markets firms will bear the brunt of the financial service sector's job losses in the current downturn, shedding 57 percent of the sector's jobs, Bloomberg said.

Capital markets workers -- bankers, traders and sales people -- are concentrated in Manhattan, which heightens the risks to the city's economy.

In 2007, those employees made up 39 percent of the city's 339,000 financial workers, Bloomberg said. These workers represented only 9 percent of the financial sector's national work force of 6 million people.

When the financial service industry rebounds from "massive layoffs," cities around the world will vie for these workers, the mayor said, saying he was acting now to safeguard the city's future.

Bloomberg also asked his aides to devise new financial regulatory reforms and report back to him and U.S. Senator Charles Schumer, a New York Democrat and senior member of the Senate Banking Committee, by the end of March.

Two years ago, Bloomberg and Schumer outlined national reforms to protect the city from losing its hometown industry to other global centers whose regulations were less rigorous. London was drawing numerous hedge funds at the time, and the two politicians said the United States should switch from its current rule-based system to the British model, which instead relies on overarching principles.

"While many of those issues continue to be of importance, the recent downturn has made the need for regulatory reform in Washington even more urgent -- though potentially in ways that are different from those envisioned in 2007," Bloomberg said.

Although much of the ire directed at Wall Street has focused on its generous bonuses, which totaled $18.4 billion last year, Bloomberg noted that more than half of the people working in financial services earn less than $100,000.

(Reporting by Joan Gralla; Editing by Dan Grebler)