New York City could lose its position as the world's financial capital if steps aren't taken to reduce regulation and litigation, Mayor Michael Bloomberg and Sen. Charles Schumer wrote Wednesday in a call for business reforms.

"Unless we improve our corporate climate, we risk allowing New York to lose its pre-eminence in the global financial-services sector," the men wrote in an op-ed piece in The Wall Street Journal. "This would be devastating both for our city and nation."

The city has been "losing ground as the leader in capital formation," with cities such as London and Hong Kong surpassing New York in the release of initial public offerings of stock, they wrote.

Schumer, a Democrat, and Bloomberg, a Republican businessman, said a consulting firm report to be released this month has identified four problems that could be driving businesses from New York: overregulation, frivolous litigation, incompatible accounting standards and globalization of the capital markets.

They urged the adoption of international accounting standards and action to discourage frivolous lawsuits. They also recommended that lawmakers reconsider the Sarbanes-Oxley Act of 2002, which they said significantly increased the auditing expenses of companies doing business in the United States.

"There appears to be a worrisome trend of corporate leaders focusing inordinate time on compliance minutiae rather than innovative strategies for growth, for fear of facing personal financial penalties from overzealous regulators," they wrote. The U.S. must restore a lost "balance between regulation and entrepreneurial vigor."

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