Press Releases
CONTACT:
Press Office
(212) 681-4840

 FOR RELEASE:

Immediately
November 17, 2009



DiNapoli: Wall Street Recovering Faster Than Expected

Report Shows Compensation Reform Could Affect This Year’s Bonus Pool

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 New York State Comptroller Thomas P. DiNapoli released today.

"Wall Street remains the engine that drives New York’s economy," DiNapoli said. "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.

"And the Wall Street multiplier impact, which created three jobs for every securities industry job created, has worked in reverse. Jobs lost on Wall Street have led to job losses in the rest of New York’s economy. New York is and will always be the financial capital of the world, but taxpayers need to be protected from Wall Street volatility."”

The DiNapoli report is a comprehensive review of Wall Street and its economic impact on the City and State. In addition to discussing the tax revenue the industry generates, the report addresses market trends and conditions, as well as trends and data related to profits, jobs, and compensation.

Highlights of the DiNapoli 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.
  • The four largest investment firms based in New York City, which are more diversified than traditional broker-dealers, earned $22.5 billion in the first nine months of 2009 compared to a loss of $40.3 billion during the same period last year.
  • Employment in the securities industry in New York City declined by 28,400 jobs since the industry employment peak in October 2007, and total job losses are not likely to exceed 35,000 jobs. (The industry added 3,600 jobs in September.)
  • Wall Street employment accounts for 24 percent of all wages paid in New York City even though the securities industry accounts for less than 5 percent of all employment.
  • The total bonus pool – including cash and deferred compensation – could be higher than last year, but compensation reform will restrict the amount paid in cash this year.

Click here for a copy of the report, or visit www.osc.state.ny.us

###

Albany Phone: (518) 474-4015 Fax: (518) 473-8940
NYC Phone: (212) 383-1388 Fax: (212) 681-7677
Internet: www.osc.state.ny.us
E-Mail: press@osc.state.ny.us