Wall Street bonuses rise 17 percent in 2017

Wall Street bonuses rise 17 percent in 2017
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The average bonus for a Wall Street employee jumped 17 percent in 2017, according to data released by the New York state comptroller Monday.

New York City traders and analysts took home an average bonus of $184,220 last year as stock prices skyrocketed during President TrumpDonald John TrumpSunday shows preview: Trump sells U.N. reorganizing and Kavanaugh allegations dominate Ex-Trump staffer out at CNN amid “false and defamatory accusations” Democrats opposed to Pelosi lack challenger to topple her MORE’s first term.

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Rising corporate earnings, economic optimism and bank profits spurred a massive boost in the stock market last year. Securities trading firms based in New York City increased their profits by 42 percent in 2017 to $24.5 billion, according to the comptroller.

"The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” said New York State Comptroller Thomas DiNapoli (D).

The increase was the largest rise in Wall Street bonuses since 2006, a year before the start of the financial crisis that roiled the world and crashed the global economy.

Banks and stock traders have been among the biggest beneficiaries of Trump’s tenure. The president has pushed for broad deregulation of the financial sector and a rollback of strict rules imposed after the 2007-08 financial crisis.

While lawmakers are squabbling over a bipartisan bill to loosen much of those rules from the Dodd-Frank Act, Trump-appointed regulators have begun proposing ways to rein in the law through federal rules.

Trump’s promise to cut the corporate tax rate also spurred consistent stock gains in 2017. The president signed the bill shortly before the new year, slashing the corporate rate from 35 to 21 percent.

While the new tax law costs banks billions of dollars in a one-time cost, it is expected to boost financial sector profits over time.

Wall Street compensation has been a flashpoint for financial sector critics who argue that lucrative bonuses encourage traders and managers to make riskier investments without regard for the consequences for the broader economy. Democrats and liberal watchdog groups have called for penalties for bank and investment firm executives whose failed, risky bets cause widespread economic harm.

Dodd-Frank required major banks to reveal how much their chief executives makes compared to their average employee. The 2010 law also told regulators to curb pay for executives who've earned excessive salaries or caused major losses for their bank, but the relevant agencies have not finalized those rules.

William Dudley, the outgoing president of the Federal Reserve Bank of New York, said Monday that the Fed should consider curbing executive pay at banks that flout federal regulations.