NEW YORK – For the hundreds of camera-toting tourists who visit Wall Street every day, the New York Stock Exchange presents an imposing sight.
The building-sized American flag draped over the exchange's towering Corinthian columns. The sculptures on the facade that symbolize the prosperity of a capitalist nation. The stern-looking statue of George Washington across the street.
These icons of national pride mark Wall Street as both a site of business and a symbol of the risk-taking and financial success that have spurred American global dominance and helped shape this country's identity.
But with the nation's top investment houses shuttered, sold or changing into staid commercial operations, doubts have emerged about whether the city that for generations has been known as the world's financial capital can retain that title — or the daredevil swagger that has defined Wall Street for so long.
It is a transformation that some say was under way long before the meltdown of 2008.
"It's going to be a long, slow process and take many years for us to really restore our leadership in the world," said Ron Chernow, who has written extensively on the history of Wall Street. "New York has been damaged, and some of it I think is permanent."
First, Bear Stearns nearly collapsed and was bought by JPMorgan Chase in a deal backed by $29 billion in federal money. Then Lehman Brothers filed the biggest bankruptcy in U.S. history and the British bank Barclays PLC swept in to buy up key units of the firm. Goldman Sachs and Morgan Stanley opted to become commercial banks. And even Merrill Lynch & Co. Inc. — long associated with Wall Street's iconic bull — announced its sale to an out-of-town commercial bank, North Carolina-based Bank of America Corp. Citigroup has been crumbling day by day in the last week.
At the same time, places like London, Tokyo and Hong Kong have become global financial centers on a scale that some believe already rival New York.
The New York Stock Exchange still far outweighs the London Stock Exchange — with the value of shares traded at the NYSE in 2007 nearly triple the $10.33 trillion traded in London.
However, the financial sway of cities such as London has been growing faster than New York's. From 1997 to 2007, the new capital raised yearly in New York dropped by nearly one-quarter — while in London the figure almost quadrupled, according to the World Federation of Exchanges.
Even the domestic market capitalization, or value of the market, has been growing faster in London than New York, the exchange federation says.
"In the short and medium term, the U.S. will still remain a very important financial center, and I think most likely the most important. But after the term of five years, I'm no more sure," said Lorenzo Gallai, economic statistician at the World Federation of Exchanges.
A loss of status in the world of finance could hurt the city on many levels. Money is stored here, higher-income jobs come here. This creates tax revenue and supports a higher quality of life, as businesses and cultural activities — which themselves attract visitors — spring up to support these workers, said Richard Sylla, a curator at the Museum of American Finance. He is also a professor of economics and financial history at the New York University Stern School of Business.
Last year, 11 percent of the city's employees worked in the finance and insurance industries, but they made nearly 40 percent of the city's income.
The meltdown is expected to wipe out tens of thousands of those jobs.
Even the top achievers in the financial field — the people in pinstriped suits who live on adrenaline, bet big and reap even bigger rewards — could be making less money.
As the major investment banks change their focus following the crisis and evolve into commercial banks, they will be more constrained by government regulation, limiting both their risk-taking and potential profits.
And the federal government's injection of hundreds of billions of dollars to bail out the banking industry also means that financial institutions will be forced to be more conservative in their investments, Chernow says. Taxpayers simply wouldn't stand for the kind of bold risk-taking that has defined Wall Street, he said.
"When you think of Wall Street ... one has an image of these very freewheeling, razzle-dazzle, buccaneering kinds of firms," Chernow said. "That style of business is now history."
David Henderson knows all about this history. He works on the floor of the New York Stock Exchange and is a fifth-generation Wall Street worker whose great-great grandfather started the family tradition in the 1860s.
Back then, London was the global financial capital. Although Wall Street traces its roots to the 1600s, it did not become the pre-eminent global financial center until after World War I.
Now Henderson wonders if he'll see that era end.
"This wheeling and dealing atmosphere we've had going on for umpteen years, that's going to be more contained," he said.
Others are not as ready to predict Wall Street's downfall, including Ted Weisberg, who has worked at the New York Stock Exchange for 40 years.
"When you walk outside the New York Stock Exchange every day, there are thousands and thousands of tourists taking pictures of a building that they're not even allowed to get inside," Weisberg said. "They're not standing out in front of the London stock exchange ... they're not standing out in front of NASDAQ."
Some observers say New York has slowly been losing ground as the world capital for years.
In 2006, Mayor Michael Bloomberg and Sen. Charles Schumer warned that New York risked being overtaken and they blamed what they said was a burdensome regulatory atmosphere.
The New York City comptroller's chief economist, Frank Braconi, warned in October that the meltdown had "sped up the process of financial dispersion that was already under way," adding that "in coming years, New York will have to share the financial stage."
It's not just other world capitals that could benefit.
"One thing New York did uniquely well was investment banking," Chernow said. "When they become commercial banks — well, commercial banks can do very well in Charlotte, N.C.; Chicago, Ill.; or San Francisco, Calif. They don't need the New York ambience to flourish."
However the crisis plays out, Wall Street still looms large to people around the world.
Visiting Wall Street during a recent vacation, Dutch tourist Maryke Heyman said she wanted to see the NYSE because of all the turmoil in the market.
"I don't know where it ends. Maybe it's not anymore the big place in the world," she said. Not long ago, she added, "It was happening here. This was No. 1."