NEW YORK CITY-While the securities industry had a strong first half of 2013—reporting profits of $10.1 billion—uncertainty in Washington and some changing conditions threaten earnings in the second half of the year, according to a new report, released Tuesday, by New York State Comptroller Thomas DiNapoli. Rising interest rates, litigation costs and the uncertainty created in Washington D.C. could limit overall earnings for the year to $15 billion.

“The political gridlock in Washington may take a bite out of the securities industry's profits for the fourth quarter,” DiNapoli says. “Washington's inability to resolve budget and fiscal issues is bad for business. Wall Street has undergone substantial changes since the financial crisis yet it remains profitable, contributing to the improved finances of New York City and New York state. Failure to resolve the federal budget and debt ceiling impasse could disrupt the economy and hurt New York City and New York state."

Profits for the first half of 2013 were close to the pace of 2012 but appear to be slowing. Over the longer term, it remains to be seen how the securities industry will perform as the Federal Reserve addresses interest rates and additional regulatory changes are implemented, the report states.

Despite its profitability over the past four years, the securities industry is smaller in New York City than before the financial crisis, dipping to 163,400 jobs in August 2013, a 13.5 percent drop in employment. DiNapoli predicts the industry will continue to streamline as it adapts to the changing regulatory and economic environments.

Salaries in the industry appear steady, but there remains a big disparity between pay on Wall Street with compensation in other fields, the report notes. The average salary (including bonuses) paid to securities industry employees in the city has remained steady in recent years at $360,700. That's lower than the 2007 peak, but the 2012 average salary was higher than before the financial crisis and was the highest average among New York City's major industries. Meanwhile, the average salary in the securities industry and the rest of New York City's private sector narrowed slightly but it remains at 5.2 times greater than the rest of the private sector, which clocks in at an average of $69,200.

The finance sector held its own on tax contributions. DiNapoli estimates New York City collected $3.8 billion in taxes in fiscal year 2013 directly attributed to the securities industry. This is a nearly 27% increase from 2012 and the second-highest level on record. However, much of the growth was fueled by higher federal tax rates in 2013 that changed taxpayer behavior. In total, the securities industry accounted for 8.5% of the city's tax revenues. Statewide, New York collected $10.3 billion in taxes during fiscal year 2012-2013; of that, the securities industry accounted for nearly 16%—it was 20% pre-recession.