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What recession? Wall Street profits on pace to hit $19B

What recession? Despite headwinds caused by weak recovery, regulatory reform and pared payrolls, New York’s financial industry is on track to post its fourth most profitable year ever.

A restructuring Wall Street is on pace to produce $19 billion in profits in 2010, far below last year’s record haul, but good enough for its fourth-best year ever, a report issued Tuesday by Comptroller Thomas DiNapoli said.
The bonus pool is expected to be smaller than in 2009—when $20.3 billion in bonuses were handed out—as money set aside for compensation by member firms of the New York Stock Exchange declined in the first half of the year, the report said. But the average payout could rise because the money will be shared by fewer workers.
The first quarter of 2010 was among the most lucrative on record for Wall Street, which posted $10.3 billion in profits. But profits waned in the second quarter, falling to $3.8 billion as firms grappled with financial reform. Current signs point to a modest third quarter as well, the report said.
“Wall Street is adjusting to regulatory reforms and learning how to do business in the new financial reality,” Mr. DiNapoli said. “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.”

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