Comptroller Tom DiNapoli’s annual report on the securities industry in New York City released today found the cash bonus pool and employment are expected to decline, while profits overall will rise. Overall, the industry is expected to record $15 billion in profits.

“The securities industry remains in transition and volatility in profits and employment show that we have not yet reached the new normal,” DiNapoli said. “The securities industry is still grappling with the fallout from the financial crisis, new regulations and slow economic recovery. How the industry negotiates this continued uncertainty could impact profitability and the finances of New York City and New York State.”

DiNapoli’s report fonud that the industry reported $10.5 billion in the first six months of 2012 and is expected to record profits of $15 billion by the end of the year unless something really bad happens, such as failure tor resolve the so-called “fiscal cliff” in Washington.

As part of the debt deal forged in 2011, automatic spending cuts and tax hikes are expected to take effect by the end of the year unless a new agreement is struck.

The first six months of 2011 included strong profits of $12.6 billion, but the second half was hampered with anemic losses of $4.9 billion as a result of the worsening European debt crisis.

DiNapoli also warns in his report that failure for Washington to resolve the so-called “fiscal cliff” could further erode economic progress here in the United States and across the globe.

The industry wound up posting record losses in 2008 following the financial collapse.

Wall Street Rpt9-2013