Economy of New York City - Finance

Finance

The New York Stock Exchange, located on Wall Street, and the NASDAQ are the world's first and second largest stock exchanges, respectively, when measured by average daily trading volume and overall market capitalization. Financial services account for more than 35 percent of the city's employment income.

New York City has been a leading center of finance in the world economy since the end of World War I. As of August, 2008 the city's financial services industry employs 344,700 workers. Manhattan is home to six major stock, commodities and futures exchanges: American Stock Exchange, International Securities Exchange, NASDAQ, New York Board of Trade, New York Mercantile Exchange, and New York Stock Exchange. This contributes to New York City being a major financial service exporter, both within the United States and globally.

The 344,700 workers in the finance industry collect more than half of all the wages paid in Manhattan, although they hold fewer than one of every six jobs in the borough. The pay gap between them and the 1.5 million other workers in Manhattan continues to widen, causing some economists to worry about the city’s growing dependence on their extraordinary incomes. Those high salaries contribute to job growth, but most of this job growth occurs in lower-paying service jobs in restaurants, retail and home health care and not many jobs in highly paid areas.

Since the founding of the Federal Reserve banking system, the Federal Reserve Bank of New York in Manhattan's financial district has been where monetary policy in the United States is implemented, although policy is decided in Washington by the Federal Reserve Bank's Board of Governors. The New York Fed is the largest, in terms of assets, and the most important of the twelve regional banks. It is responsible for the second district, which covers New York State and the New York City region, as well as Puerto Rico and the U.S. Virgin Islands. The New York Fed is responsible for conducting open market operations, the buying and selling of outstanding US Treasury securities. In 2003, Fedwire, the Federal Reserve's system for transferring balances between it and other banks, transferred $1.8 trillion a day in funds, of which about $1.1 trillion originated in the Second District. It transferred an additional $1.3 trillion a day in securities, of which $1.2 trillion originated in the Second District. The New York Federal Reserve is the only regional bank with a permanent vote on the Federal Open Market Committee and its president is traditionally selected as the Committee's vice chairman. The bank also has the largest gold repository in the world, larger even than Fort Knox. Its vault is 80 feet (25 m) beneath the street and holds $160 billion worth of gold bullion.