NEW YORK CITY-Given high volatility in the stock market, asluggish domestic economy and uncertainty due to the Europeansovereign debt crisis, Wall Street profits, jobs and bonuses arelikely to drop by the end of 2011, according to a newreport from the New York State ComptrollerThomas P. DiNapoli. The weakened outlook has beenprompted by the OSC’s estimation that the city could lose nearly10,000 jobs by the end of 2012, which would bring total job lossesin the securities industry to 32,000 since January 2008.

Based on the financial sector’s diminished role as an economicengine for New York City and the state, DiNapoli warns that furtherjob cuts will “complicate already tough fiscal situations” forgoverning bodies who are already struggling to bring in tax revenueand maintain essential services. “These developments will have arippling effect through the economy and adversely impact state andcity tax collections,” he says, in a statement. “As we know, whenWall Street slows, New York City and New York State’s budgets feelthe impact, and that is a concern,” he adds.

According to the OSC, securities-related activities--meaningbanking, insurance, securities and real estate--accounted for 14%of New York State’s tax revenues and almost 7% of the city’s localeconomy. From fiscal years 2008 to 2010, city collections frompersonal income and business taxes fell by more than 50% to $2.3billion, thus widening the city’s growing budget gap based uponlosses in the securities industry.