Forbes.com: Bank One deal a blow to Chicago as banking hub Jump | Free Trial Issue Search | Advanced Search Select Section Home Investment Newsletters Polls & Discussions Premium Tools Special Reports Video & Audio Watchlist IT Research Library Business -Manufacturing -Technology -Commerce -Services -Energy -Healthcare -Small Business Technology -Enterprise Tech -Future Tech -Personal Tech -Networks -E-Business -Science & Medicine Markets -Equities -Economy -Commodities -Bonds -Emerging Markets -Currencies Work -Careers -Compensation -Entrepreneurs -Management Lists -Companies --Forbes 500s --Forbes Global 500 --200 Best Small Cos. --400 Best Big Cos. --Largest Private Cos. -People --World's Richest People --100 Top Celebrities --400 Richest Americans --Best Paid CEOs -Places --Best Places Personal Finance -Estate Planning -Funds -Philanthropy -Retirement -Strategies -Taxes Lifestyle -Collecting -Health -Real Estate -Sport -Travel -Vehicles -Wine & Food Columnists Magazines -Forbes Magazine -Forbes Global -Forbes FYI -Forbes ASAP -Best of the Web -Archives -Subscriptions Tools About Us Contact Us Help Reprints/Permissions Sitemap Advertising Conferences Forbes Collection Forbes Mobile Special Advertising U.S. | EUROPE | ASIAHOME PAGE FOR THE WORLD'S BUSINESS LEADERS Home > Breaking News Related quotes JPM39.22+ 0.32 ONE45.22+ 0.61 1/14/04 4:01:00 PM ET Bank One deal a blow to Chicago as banking hub Reuters, 01.14.04, 8:04 PM ET ADVERTISEMENT E-Mail Alerts Companies ABN JPM ONE Topics Labor Employment Banks Banking Enter E-Mail Address: FAQ | Privacy Policy Mortgage Services from Homebound Mortgage Apply For A Mortgage Today’s Mortgage Rates Home Equity Mortgage Calculator Free Credit Report FHA & VA Mortgage Loans Buyers Calculator How Much Can You Borrow? Should I Refinance? Low Home Equity Rates Please enter your name and email to begin: Name: Email: Click 'Continue' to complete your subscription order. eLibrary @ Forbes.commore > Research topics related to this story in the eLibrary news and magazine archives. Labor Employment Banks Banking By Ros Krasny CHICAGO, Jan 14 (Reuters) - Chicago's place in the pecking order of U.S. banks slipped on Wednesday with news that J. P. Morgan Chase & Co. (nyse: JPM - news - people) would buy Bank One Corp. (nyse: JPM - news - people), the largest bank headquartered in the "Windy City." The combined company will be run from New York, with seven board members drawn from each institution. It will be known as J.P. Morgan Chase. Chicago will maintain a strong role in the combined bank. It will be headquarters for the retail financial services business, including consumer banking and lending, but not credit cards and middle-market business. Still, Bank One -- which itself moved to Chicago from Columbus, Ohio after a merger with First Chicago NBD Corp. in 1998 -- joins a vault full of Chicago banks that have been folded into other domestic or foreign institutions. Chicago's No. 2 bank, LaSalle Bank Corp., is a subsidiary of ABN AMRO Holding N.V. (nyse: ABN - news - people) of the Netherlands. Harris Bank, with 150 locations in the Chicago region, is owned by Canada's BMO Financial Group . Several other companies -- from oil giant Amoco Corp., swallowed up by British Petroleum, to Quaker Oats, bought out by PepsiCo -- have scaled down their Chicago operations. Chicago's once dominant futures and options exchanges also have lost their world supremacy. Aircraft maker Boeing Corp. bucked the trend, moving to Chicago from Seattle in 2001. But for Chicago banks, the tide has been running out for years, said Anil Kashyap, professor of economics and finance at University of Chicago's Graduate School of Business. "The tragedy for Chicago is that decisions were made 20 years ago that have have left more banks sitting in Charlotte, North Carolina, than here. You can't really think of Chicago as a banking center," Kashyap told Reuters. Chicago's diminished role in banking started in the 1980s when interstate banking and the extension of branches began ramping up, he said. Illinois had far more restrictive laws against expanding bank branches than, say, North Carolina, which is now home to Bank of America and Wachovia Bank. "My students never think that they will be working in banking in Chicago -- and that's been true for a while," Kashrap said. JOBS ON THE CHOPPING BLOCK In the meantime, the combined bank formed by J.P. Morgan's acquisition of Bank One -- which will be the second largest in the United States -- will surely seek out "enhanced efficiencies" in the form of layoffs from among its 164,100 workers. The mood among dealers on Bank One's Chicago trading floor ranged from despondent to enraged at hearing the news. And workers streaming out of Bank One's headquarters at the close of business had job security on their minds. Late Wednesday, J.P. Morgan Chase Chairman and Chief Executive William Harrison said the $58 billion merger will lead to the elimination of about 10,000 -- "about 7 percent of our domestic work force of about 145,000." Faith Thomas, a temporary worker in the ATM balancing department, said she was concerned that she now would not get a full-time job with Bank One. Bank workers first heard about the merger from news reports, but managers later had a 20-minute meeting to convey the news, she said. The merger also leaves the Chicago Federal Reserve Bank, one of 12 regional Federal Reserve banks, with a little less to regulate. Mergers in recent years have left the Chicago and Boston Feds with few banks on their hands while the Richmond Fed, once seen as a relatively sleepy Southern institution, regulates some of the country's largest. For some Chicago retail banking customers, the Bank One merger with J. P. Morgan Chase means their checking accounts will move -- again. Retail accounts parked at Chicago's Continental Bank in the late 1980s were shifted to First Chicago, which later became First Chicago/NBD and then Bank One. The mailings to retail customers could soon start coming in envelopes with yet another bank's name on them. (Additional reporting by Meredith Davis) Copyright 2004, Reuters News Service Send comments E-mail story Ad Information Forbes.com Wireless Reprints / Permissions Subscriber Services © 2004 Forbes.com™ All Rights Reserved Privacy Statement Terms, Conditions and Notices Online Marketing by Market data provided by Reuters. Disclaimer Stock quotes are delayed at least 15 minutes for Nasdaq, at least 20 minutes for NYSE/AMEX. U.S. indexes are delayed at least 15 minutes with the exception of S&P 500 which is real-time. Forbes 40 Index powered by Telemet. News may include latest headlines from Reuters.