Wall Street firms' collective 2010 profits may fall 69% from a year earlier on less activity in the securities industries, more financial regulation, and fewer gains from Federal government bailouts, according to a New York State Comptroller report released Tuesday. Nevertheless, 2010 profits still may be the fourth-highest on record.

Financial institutions' profits this year may total $19 billion, down from 2009's record $61.4 billion, New York State Comptroller Thomas DiNapoli said in the report. Wall Street firms earned $14.1 billion for the first six months of the year, down 61% from a year earlier, as revenue dropped 27%.

"The fallout led to bank failures, consolidations, and regulatory reforms that have changed the way the securities industry operates," DiNapoli said in the report. "New regulations will require increased capital reserves, limits on some activities, and compensation practices that reward long-term performance rather than short-term gains."

With earnings down, Wall Street firms will have cut about 38,000 jobs during the financial crisis. Firms cut 2009 wages from a year earlier by 29%, the largest single-year drop in at least three decades.

After two years of losses, Wall Street returned to record profitability last year largely because of Federal government bailouts. Financial firms' 2009 profit was almost three times that of 2006, according to the report.


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M & M IDEA

"Profits" occurred because the "income" from Govt (read: you and me) was used to pay out obscene unearned bonuses. Profits THREE TIMES what they were in 2006. Aren't you glad this central planning fiasco occurred. And how does our fine Administrative branch propose to solve that? TAX em higher??? How about we don't GIVE them the $$$ to begin with? Any one else seeing this "shell game" a bit clearer? If not ... It must be rather stuffy having one's head up one's arse ...

November 16 2010 at 7:05 PM Report abuse +1 rate up rate down Reply