Profits for New York City’s securities industry have climbed to the highest level since the end of the recession sparked largely by the 2008 global financial crisis.
Wall Street pretax profits totaled $13.7 billion in the first half of 2018 for an 11% increase from the year-ago period, reaching the highest level since 2010 when adjusting for inflation, according to a
The analysis noted there are now around 120 securities industry firms, compared to 200 prior to Lehman Brothers' Chapter 11 bankruptcy filing on Sept. 15, 2008.
“Wall Street has profited every year since the end of the recession in 2009, and compensation last year reached its highest point since the financial crisis,” said DiNapoli. “The momentum from last year’s dramatic rise in profits has carried into 2018 and the industry is on track for another good year absent a setback later in the year.”
DiNapoli estimates that tax collections tied to New York City’s securities industry grew by 29% to $4.2 billion in the 2018 fiscal year that ended June 30. The report also notes that the industry accounted for 18% of New York State tax collections in the state’s fiscal year calendar that lasted from July 1, 2017 to June 30, 2018.
“The securities industry is a major source of revenue for New York City and New York State, and is an important part of the city’s economy,” said DiNapoli in a statement. “Ten years after Lehman Brothers’ collapse it is clear that Wall St. does not need to return to the days of excessive risk-taking to enjoy rising profits.”
The Big Apple’s strong 2018 securities industry performance followed a 42% spike in pretax profits last year and 21% jump in 2016. DiNapoli said that the 2016 profit increase was attributable to lower costs while higher revenues aided last year’s rise. Revenue growth was strongest the last two years in wealth management and account supervision, underwriting and trading.
DiNapoli
The New York City securities industry is on pace to add 1,700 jobs in 2018 based on first half trends, according to DiNapoli. Wall Street gained 10,600 jobs between 2010 and 2017, but the industry is still 6% smaller than before the financial crisis, DiNapoli’s report said.