Chicago, Societe Generale’s Kind of Town
Joe Moreno, a senior banker based in Societe Generale’s Chicago office, has lived in Chicago for over 30 years. In his role covering corporate clients, Joe usually travels around the country and internationally 2-3 days each week, which makes him a good person to have a quick chat with about what makes Chicago so appealing for financial services firms like Societe Generale and as a nice place to come home to.
Chicago has a long history as a center for financial services, perhaps most notably as one of the founding centers for the derivatives industry. What is it that makes this city fertile ground for the financial services industry today?
Chicago’s history as a derivatives center is tied to a number of historical factors that include its central location, the heavy grain production out of the U.S. Midwest, and its position as a transposition hub in water, rail - and ultimately air - all of which helped Chicago develop as a center for storage, sale and distribution of grains and other crops. And, in turn, it developed as the biggest market for derivatives contracts trading on these commodities. The predecessor to today’s leading listed derivatives exchange, the Chicago Mercantile Exchange (CME), was the Chicago Board of Trade which opened in the mid-1840s.
Over time, and as the derivatives markets developed to include financial derivatives, too, Chicago became a magnet for all the inter-related talent in this area, including attorneys, traders and brokers, accountants and other related professionals.
At one point in time, Chicago hosted more than 50% of exchange-based derivative trading in North America and accounted for 18% of the world’s global derivative trading market – double that of New York.
Impressively, in 2018 Chicago generated total economic output of US$700 billion which would make it the 20th largest economy in the world. So, with Chicago’s central role in derivatives and Chicago’s diverse industrial base, it’s a natural for Societe Generale with its focus on derivatives and structured finance to have a significant presence here.
Are there certain midwestern or Chicago industries that attract a certain type of financial services institution or banker?
Chicago has a very diverse industrial base with many industries having a presence and history in the city. This includes the financial industries, food and grain, general manufacturing, printing, publishing, architecture, distribution, transportation, insurance and technology and services. The local financial community is very competitive and according to the Global Financial Centers Index, Chicago was ranked as having the seventh most competitive financial center in the world and third in the US (after New York and San Francisco).
What would most surprise a person in finance transferring to Chicago from, say NY or London?
Many people who come from places like London or New York are sometimes surprised to find a large, cosmopolitan, clean city, with very friendly people, multiple world-renowned universities, a large cultural artistic base, great public transportation within the city/suburbs, and easy access to other US cities via O’Hare Airport. You can get to either coast in 2-4 hours, and as a major hub for three of the largest US airlines, you have multiple and majority access to direct flights. Chicago is also at the base of the Lake Michigan and the Great Lakes, the largest source of fresh water in the US. In general, it amounts to a diversified city with many professional and quality of life attributes. Most know Chicago via its reputation as a windy city - which refers to the politics not wind speed, by the way - but are pleasantly surprised when they visit.
On the finance side, there are approximately 77K finance and insurance related jobs in the Chicago area, making it the 7th largest industry. Illinois also has depth in its banking history with a total of 325 banks being state chartered in addition to the national bank competitors. This depth is driven by the diversity of business in Chicago with its historical base in derivatives as mentioned above and other diverse industries including historical strengths in banking, printing, healthcare, publishing, food, general manufacturing and a growing and sizable technology industry. Chicago is home to 36 of the Fortune 500 companies.
Lastly but most importantly, which city has better pizza (or steaks), NY or Chicago and why? Honestly.
I have to give Chicago the edge on both, the steaks and pizza. However, I will admit it’s pretty hard to eat more than one slice of Chicago stuffed pizza, and you can eat a lot more of NY style pizza in one sitting. Grab whatever works for you at that time. Pizza is one of the world’s most popular food inventions, no matter the style.
Nothing tops a good Chicago steak!!!!
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