A legally restricted and economically "retarded" financial-services sector inevitably has serious adverse effects on competitive performance throughout United States international trade.

The governor argues that a tax cut on dividends would help bolster the financial-services sector.

Shorting the financial-services sector, mainly banks and savings and loan institutions, has paid handsomely, and much of the short interest is concentrated in these stocks.

But because the financial-services sector continues to boom, taxes have climbed and growth in other areas of the economy, like tourism, has also produced added revenue.

The city's economy, it said, remains too reliant on the financial-services sector, which has historically been volatile.

But he acknowledged that he worried about the future, especially about New York City's financial-services sector and Long Island's defense industries.

Also, he warned, "avoid Greater New York since the weakening of the financial-services sector may hurt loan quality."

For one thing, London has the only world-class financial-services sector in Europe.

The cost cutting will spread beyond Manhattan and beyond the financial-services sector, but not in an evenhanded way.

It is heavily dependent on sales to the financial-services sector, which has been badly bruised and has virtually stopped buying big systems.