What’s On Wall Street? Fewer Banks, More Condos
Filed by KOSU News in US News.
October 24, 2011
Demonstrators who have been camped out in a small park in Lower Manhattan want to draw attention to what they see as abuses by the nation’s financial system, and they chose Zuccotti Park because it’s around the corner from Wall Street. But the street most associated with the American financial industry is no longer the physical home to banks that it once was.
Though Wall Street remains the symbolic center of American capitalism, most of the financial industry’s biggest players long ago decamped for other places with the advent of computerized trading technology.
People who come to Wall Street for the first time are often surprised by how small it is, at just a few blocks long. And yet for much of its history, this little street was the epicenter of the U.S. financial system.
“Wall Street just got to be the place where you went to do your banking, where you went to buy and sell your stocks and bonds,” says Richard Sylla, chairman of the Museum of American Finance. “The House of Morgan was here, National City Bank [of New York] was here, the First National Bank was here.”
One brisk afternoon recently, Sylla and I went for a stroll down Wall Street. The sun had fallen behind the high buildings, and the narrow street was already in shadow. Because of the demonstrators, metal barricades have been placed across Wall Street, and the sidewalks were choked with pedestrians. Most of them appeared to be tourists.
Sylla says in recent decades there has been a huge exodus away from Wall Street. Today there are far fewer big firms than in the past, he says, because banks like Citi and Chase have moved uptown.
Right now the only major bank still on Wall Street is Bank of New York Mellon, though Goldman Sachs isn’t far away on the West Side of Lower Manhattan. Many of the grand old buildings that once housed Wall Street firms have been converted into condos.
With Computers, A Decentralization
Charles Jones, a professor of finance and economics at Columbia Business School, says what’s happened on Wall Street has everything to do with technology. Back before the telephone, people who traded stocks needed to be near each other.
“Everything had to be done by courier, by messenger, by having a runner go from one place to another … [so] you needed to really have that physical proximity,” Jones says.
But the decentralization of Wall Street has really accelerated with computers, he says. At one time, for instance, stocks were traded mostly through the New York Stock Exchange at its iconic columned building on the corner of Broad and Wall streets. Today, however, you can buy and sell stocks from anywhere in the world.
Most stock trading now takes place on electronic exchanges, on computers that can be located anywhere. Even the NYSE does most of its trading electronically.
“That’s still where the trading floor is, but the trading floor is basically a showpiece these days,” Jones says. “The vast majority of the trading is happening on a computer somewhere in suburban New Jersey.”
Why Demonstrate Here?
So Wall Street itself is no longer the physical center of the American financial markets and hasn’t been for some time. For that reason, says Sylla of the Museum of American Finance, there hasn’t been much of a backlash to the protests.
“One of the reasons there hasn’t been more of what you might call a Wall Street … reaction to Occupy Wall Street is that so much of Wall Street is someplace else and is not being very inconvenienced by the occupiers who march around and beat on their drums and so on,” he says.
So why demonstrate here, and not in Midtown where the really big firms are now located? Over at Zuccotti Park, Mark Bray, part of the ad hoc press team that answers media questions, says the point of the protests isn’t to send a message to CEOs.
“We’re not expecting that they’re going to change what they’re doing because they hear our protests,” he says. “Instead we’re trying to appeal to the wider public to re-envision our relationship to democracy and really re-envision how we need to rethink the priorities of this economy.”
Bray says Wall Street remains a symbol of high finance. The protests are a reminder of how potent that symbolism remains, even if much of the financial industry has moved away. [Copyright 2011 National Public Radio]