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Chicago Finance Jobs Picking Up New York’s Slack

Posted on August 6, 2008

Despite problems on Wall Street and in other corners of the country, people are finding many opportunities for Chicago finance jobs.

According to a recent article in the Chicago Tribune, finance jobs in Chicago have remained strong-and even continue to hire new employees-despite the fact the city’s unemployment rate rose to 6.8 percent in June. Job postings for trading firms in the city can offer salaries as high as $600,000, while the average Chicago wage equals $45,710.

Mesirow Financial, based in Chicago, has entered discussions with more than 30 traders, bankers and investment managers. The firm also recently hired executives who previously worked for Bear Stearns Co., including the head of the company’s municipal bonds desk.

Employment in the securities and commodities industries has also managed to keep heads-up, showing an unusual resiliance. Meanwhile, larger firms such as Citigroup, Merrill Lynch and Lehman Brothers are losing money.

“Members of the Chicago trading community say the transparency and technology provided by the futures and options exchanges has insulated them from losses the International Monetary Fund estimates will total $1 trillion,” the article notes.

New York City’s five boroughs have 180,000 people working in the financial industry, according to the United States Department of Labor Bureau of Labor Statistics, 7,600 less jobs than it had last year. While New York has four times the number of people working in the industry, it is estimated the smaller size of Chicago’s financial industry has helped mask the impact of layoffs.

Over the past 10 years, jobs in Chicago increased 13 percent, adding 46,400 positions. This caused a variety of software companies, online brokerages and traders to consider locating their firms in Chicago.

So what’s the big difference between the two markets?

“The most significant cultural gap between Wall Street and Chicago involves the futures and options exchanges,” the article adds. “Chicagoans primarily buy and sell commodities, foreign currencies, U.S. Treasury bonds and stock options through the CME Group or Chicago Board Options Exchange. The prices on those contracts are public and all deals go through a clearinghouse, which ensures that brokerage accounts have adequate funds.”

More recently, the senior management of 17 major investment banks in New York City agreed to establish a centralized clearing system for over-the-counter credit derivatives. The policy has been endorsed by the Federal Reserve Bank of New York.

“In New York, financial firms have been hit very hard by the credit crisis, and they’re trying to do all kinds of things to reduce their costs,” said Ilya Talman, president of the executive search firm Roy Talman & Associates in the article. “In Chicago, we’re not seeing it. If anything we’re going to benefit from it because there is going to be more of a push into exchange activities. In other words, what ails New York may help Chicago.”