As the Texas financial market has grown rapidly in recent years, it is threatening the stature of New York, the United States' traditional financial center. Large financial companies, drawn by low taxes and relatively loose regulations, have been expanding their operations in Texas one after another, and the financial job growth rate has already far outpaced New York.
According to major foreign media on the 9th (local time), the Texas Stock Exchange (TXSE) began official transactions last month, throwing down a challenge to New York. TXSE was pursued after some executives of listed corporations complained that regulations at the New York Stock Exchange (NYSE) and Nasdaq were excessive. TXSE secured an initial $275 million investment from Wall Street financial heavyweights including BlackRock and Citadel Securities, and recently also unveiled plans to raise an additional $160 million.
Big banks are also racing to set up large bases in the Dallas area. In Dallas Uptown, Bank of America is building an office tower, and Goldman Sachs is constructing a campus where more than 5,000 employees will work. Excluding New York, it will be the largest among Goldman Sachs' business sites in the United States. Last year, U.S. banking giant Wells Fargo opened a campus in Las Colinas, an upscale area near Dallas-Fort Worth International Airport.
The fast-growing Texas financial hub is sometimes called "Y'all Street," a nod to Wall Street, the United States' traditional financial center. "Y'all" is a contraction of "you all" commonly used in Texas and across the American South. Local authorities are reportedly even considering changing an actual street name to "Y'all Street."
The growth in financial jobs is also notable. According to the Federal Reserve Bank of Dallas, since Feb. 2020, financial-sector jobs in Dallas have surged 23.2%. That far exceeds New York City's growth rate (6%) over the same period. It also contrasts with Chicago, Boston and San Francisco, where financial jobs have yet to recover to pre-pandemic levels. In particular, as of June this year, Dallas had 317,000 workers in finance, insurance and real estate, accounting for 10.1% of total employment. That surpassed New York City's share (9.9%).
Analysts say Texas' rapid rise as a financial hub stems from low taxes, relatively loose regulations and strong political backing. The Washington Post (WP) reported that, for years, financial companies and financial workers have moved to Texas for these reasons, adding, "Recently, the trend has become too clear for anyone to ignore."
With strong political support at its back, Texas is quickly emerging as a financial hub. Last year, the Texas state legislature moved to limit State Governments-level taxation on securities transactions and to raise the bar for shareholder lawsuits against corporate directors and executives, advancing finance- and business-friendly legal reforms.
Politicians are personally reaching out with active "love calls" to financial companies. Eric Johnson, the Dallas mayor and the only Black Republican among big-city mayors in the United States, said on the social media platform X, "In Dallas, we strongly support the police, value our corporate partners, embrace the free market, reject overregulation, and protect the American dream," urging a transfer to Dallas.
Of course, Texas is not yet at the point of threatening New York's prestige. Most top executives at large financial companies are still in New York, and TXSE has yet to attract a single company for regular listing. Even so, the financial industry is paying attention to Texas' steep growth.
Jamie Dimon, JP Morgan chief executive officer (CEO), treated the Texas business as a separate item in a letter to shareholders last year, calling Texas "a great place to do business that values the power of free enterprise."