Wall St could axe 20,000 jobs in crash

Wall Street profits will crash 80% to $3.2 billion (£1.61 billion) and New York could lose 20,000 financial sector jobs over two years, says an official city report.

The Independent Budget Office (IBO) predicts profits for 2007 will hit their lowest since 1994, down from $20.9 billion in 2006.

The crisis could devastate New York where banks and brokerages account for 35% of all salaries. Big banks have already written down $150 billion on the subprime fiasco.

Around 12,600 jobs could go this year followed by 7600 next year.

"The economic situation is particularly precarious," said IBO director Ronnie Lowenstein.