The New York Stock Exchange (NYSE) may be forced to locate a second trading floor outside New York City to ensure the world's largest stock market could operate after a nuclear attack, Chairman Richard Grasso said.
The exchange, which abandoned plans to expand across from its Wall Street building after the Sept. 11 terrorist attacks, has determined that 40km from its Manhattan headquarters is the farthest away a trading floor could be built and still remain in New York City. That might not be far enough.
"The more we work at it, the more we realize that to do it right, you have to do it at a nuclear distance," Grasso said in an interview. "You can't be in the city if you can't be comfortable within a 25-mile [40km] distance." Several Manhattan-based companies, including Morgan Stanley, made plans to move some operations outside the city after the attacks on the World Trade Center and Pentagon last year that killed more than 3,000 people and closed the New York Stock Exchange and other US markets for four days. None of those companies cited fear of a nuclear attack.
Grasso didn't say what he meant by "nuclear distance." A spokesman, Ray Pellecchia, declined to clarify the remarks.
An attack could involve a nuclear device that's smuggled into New York City, or a so-called dirty bomb, a regular explosive that contains radioactive material, analysts say.
Terrorists could build a nuclear bomb "only with enormous difficulty," according to a Brookings Review article earlier this year. A dirty bomb is "more feasible," according to the article, published by the Brookings Institution, a Washington-based think tank.
NYSE officials "are clearly very security conscious and they're trying to process threats against them," said Daniel Doctoroff, New York's deputy mayor for economic development.
"They've expressed concerns about dirty bombs without going into any detail," he said. "Worries about a nuclear attack we haven't heard." The NYSE's decision to split its trading floor in two, with half its daily business occurring in one location and half in the other, stems from a need to protect the institutional knowledge of its specialists. Unlike the NASDAQ Stock Market, which is decentralized with traders spread around the US, the NYSE's business is in one place: on its floor. A terrorist attack that wiped out the NYSE while traders were in it would disable the oldest US exchange.
Big Board officials are talking to the city about how the exchange might build in one of New York's five boroughs, and have considered sites on western Staten Island, eastern Queens and the northern part of the Bronx, Grasso said. They've also looked north of the city in New York State's Westchester County.
Grasso said the exchange may build the new trading floor underground, depending on where it's located. It might also include resources enabling employees to stay on the premises for several days, he said.
The exchange employs 4,500 people in its 11 Wall Street building and its annexes.
"If there is a nuclear attack, there is no safe place," said Andrew Alper, president of the city's Economic Development Corp, which makes low-cost loans and grants to businesses as an inducement to locate or remain in New York. "Where does he expect to go? Cheyenne Mountain?" Alper said, referring to the US government defense computer site near Colorado Springs, Colorado, which is 610m underground.
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