New York, New York, It's a Banking Town: Two Consummate Insiders Reflect on the Early and Recent History of Banking in the Big Apple, and Consider Where It's Headed

By Streeter, Bill | ABA Banking Journal, October 2004 | Go to article overview

New York, New York, It's a Banking Town: Two Consummate Insiders Reflect on the Early and Recent History of Banking in the Big Apple, and Consider Where It's Headed


Streeter, Bill, ABA Banking Journal


When Ron Chernow was researching his acclaimed new biography of Alexander Hamilton, he didn't lack for material. Hamilton was prolific writer and many items he wrote still exist in his original hand. Further, the bank that Hamilton was instrumental in founding in New York in 1784, still exists. And in its headquarters, just a few blocks from where its original offices were situated, The Bank of New York keeps an archive in which its original charter, written by Hamilton, still resides, as well as a wealth of other historical material chronicling the bank's 220-year history. Chernow acknowledges the bank's archives in his book, Alexander Hamilton, released in April buy Penguin Press.

A couple of miles away, interestingly enough, enclosed in a glass case in the executive offices of JPMorgan Chase, long-time rival to the Bank of New York, sit the pair of dueling pistols used by Aaron Burr and Hamilton in their fateful duel of 1804 that led to Hamilton's death at the age of 49.

There's a lot of banking history in New York City, evoking names like Hamilton and Morgan and, more recently, Rockefeller and Wriston. There has also been a great deal of historic change in America's Money Capital over the decades, which has influenced, and continues to influence, the shape of banking and financial services in this country.

So it is fitting that once again the annual convention of the American Bankers Association, founded in 1875 and based in New York until 1971, is being held in New York City.

Two people who are not only closely associated with banking in the city, but students and keepers of its history, are Thomas Renyi, chairman and CEO of The Bank of New York, and Michael Smith, president of the New York Bankers Association. Both have been with their respective organizations for upwards of 30 years and have been witness to the historic changes banking has undergone in that time. The two agreed to an interview to put the city's history and current status in perspective.

Over its 220-year history, the $97.5 billion-assets Bank of New York, has weathered numerous panics and financial crises, which were a regular feature of the financial landscape of a rapidly growing and largely unfettered young country. In almost every case, thanks to conservative leadership that avoided the worst of the speculative excesses that prompted the panics, the bank usually emerged stronger than ever and often paid dividends right through the difficult periods.

Renyi (pronounced Renni) can't say whether his predecessors were particularly prescient, but he says that "the bank has always been a company, and still is, that knows what it should be, and has an understanding of the obligation we have to not only our shareholders, but our depositors." It also understands its place in history.

In harm's way

The bank's greatest test was not a financial panic-not even the Great Depression. Nor was it the frequent and severe yellow fever epidemics that often swept through the city in it's the post-Revolutionary War years. It was the events that unfolded with mind-numbing swiftness a little over three years ago.

Of all New York City's major financial institutions, Bank of New York had the largest presence in downtown Manhattan. Its headquarters at 1 Wall St., and its primary operations center on Barclay St., are both just a block away from the World Trade Center. The Barclay St. building, in fact, was across the street from 7 World Trade Center, the 50-story tower that was the last building to collapse that day.

Sept. 11, 2001, was board day at the bank, Renyi vividly recalls, and some board committee meetings were already in progress at the time the first tower was hit. The committee members didn't know what had happened right away, except that the north tower was on fire.

Sixteen minutes later events crystallized.

"We all heard the explosion as the second plane hit," Renyi recalls. …

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