Banks clambering to set up FX shops in Boston

Bear Stearns and Royal Bank of Scotland are among a raft of international banks setting up forex sales desks in Boston. The banks are attempting to take advantage of the centre's established pensions and mutual funds client base, market participants told RiskNews ' sister publication, FX Week .

David Schoenthal, head of FX at Bear Stearns in New York, said he expected to have three FX sales dealers in Boston by the year-end, working alongside the bank's existing fixed-income team there.

"We want to cross-sell the relationships that we have on the fixed-income side with foreign exchange specialists for institutional business and equities, [both] for new and existing client business," Schoenthal said.

The bank studied hiring foreign exchange sales dealers in the Boston office for about a year, Schoenthal added, prompted by the market's increasing focus on the dollar's performance.

Simon Wilson-Taylor, head of Boston-based bank State Street Corporation's e-commerce platform Global Link, said the return of national and international banks to the centre was probably "long overdue".

"There's a recognition that the institutional customer business is well set-up in Boston," he told FX Week. "It's a buy-side town."

He added that banks that may have cut back regional sales centres are now realising the importance of having local sales dealers.

Bear Stearns and RBS have already made hires for their fledgling sales desks in Boston, both picking up dealers from local player FleetBoston Financial Corporation.

Royal Bank of Scotland has hired Doug Schaefer from the Boston-based bank. He starts in Boston this week, having joined as a senior vice-president in FX sales and interest rate derivatives on June 24. He has spent the past week working from the bank's New York office and reports to Garry Popofsky, head of foreign exchange sales for North America, who is based in New York.

The bank could not give any further details of its new Boston business.

Bear Stearns' new Boston team is the bank's third sales desk, adding to a team of eight dealers in New York and seven in London. There are no plans to build any other regional centres, said Schoenthal.

RBS's new Boston sales team is the bank's sixth global desk, and its second in the US. The bank's other sales centres are in London, Edinburgh, New York, Hong Kong, Tokyo and Singapore, said a spokesperson at the bank in London, although the bank was unable to provide headcount figures.