The securities industry in New York City has returned to profitability faster than expected in the wake of the global economic recession, but the impact of a reorganized Wall Street on the coffers of the City and State of New York remains uncertain, according to a report by New York State Comptroller Thomas P. DiNapoli.
“Wall Street remains the engine that drives New York’s economy,” says DiNapoli. “It’s encouraging that the industry is recovering faster than forecast. However, no one can predict the impact of compensation reform, which could restrict cash bonuses. Because of that uncertainty, New York can’t rely on tax revenues from Wall Street to save the day.
The Wall Street multiplier impact, which created three jobs for every securities industry job created, has worked in reverse, he adds. “Jobs lost on Wall Street have led to job losses in the rest of New York’s economy,” said DiNapoli. “New York is and will always be the financial capital of the world, but taxpayers need to be protected from Wall Street volatility.”
Other key points of report include:
- Broker-dealer operations of New York Stock Exchange member firms earned a record $35.7 billion in the first half of 2009 – more than 1.5 times the previous annual peak set in 2000.