Report: Wall Street profits way down from last year's record
Wall Street is facing a sharp drop-off from last year's record profits, according to a report Tuesday by New York State Comptroller Thomas DiNapoli.
After seeing a blockbuster 2009, which was fueled by government help and low interest rates, banks are experiencing a slowdown in both revenues and profits. Still, the New York report found the industry is set to deliver its fourth-most profitable year in absolute dollars.
Wall Street profits could reach $19 billion for 2010, which is 69 percent less than last year's record total of $61.4 billion.
Wages were down, as well. The report indicates that securities industry employees working in New York City were paid 28.5 percent less in 2009, the biggest decline in at least 30 years.
The industry is facing a slowdown because consumers are saving more, which reduces the demand for lending. Total consumer debt, excluding mortgages, has dropped 6.1 percent, or $156 billion, from its peak in 2008, said the report.
Banks are also up against new rules limiting the charges they can demand from consumers, such as overdraft fees.
"Wall Street is adjusting to regulatory reforms and learning how to do business in the new financial reality," DiNapoli said in a statement. "These actions may trim profits and cash bonuses in the near term, but they are necessary in order to encourage long-term stability and profitability."
Jia Lynn Yang
| November 16, 2010; 4:28 PM ET
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