NYC economy could take hit as Lehman falters

By Joan Gralla

NEW YORK (Reuters) - New York City's economy will likely suffer should Lehman Brothers lay off more staff as the credit crisis unfolds.

Banks and brokerages have long anchored the city's economy, in much the same way car-makers previously powered Detroit. The global credit crunch now in its 13th month has already spawned deficits in both the city and state budgets.

"I am very concerned about the situation at Lehman Brothers," said Democratic City Comptroller William Thompson.

"The way in which it is resolved will affect its impact on New York City's economy and tax revenues," he added.