Bank of America and Goldman Sachs are now chasing the same bankers

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If you live in the UK, you may be familiar with the phrase, "a local shop for local people," from the surreal BBC comedy series, The League of Gentleman. If you live in the U.S., you may want to familiarize themselves with the phrase (if not the program): it's the latest big idea, applied in an investment banking context.

Following yesterday's revelation that Goldman Sachs is looking for bankers to deal with mid-market clients in "secondary" North American cities like Atlanta, Dallas, Seattle and Toronto, Bank of America said today that it's doing much the same.

In a presentation during BofA's Future of Financials Conference, Tom Montag, BofA's chief operating officer, said the bank wants "local people with local knowledge" to serve local clients in expanding investment banking teams in the likes of Seattle and Denver.

"We think there is growth there," said Montag, "Growth in the number of products, particularly investment banking products that we can offer middle markets clients across the country."

This is bad news for Goldman Sachs, which will clearly have competition for billions of extra mid-market revenues from Bank of America (which already has local relationships thanks to its corporate lending teams). It's good news, however, for all those local bankers with local knowledge, who will seemingly be at the front of the hiring queue in 2018.

BofA and Goldman's mid-market aspirations appear to apply mostly to the U.S.. However, Montag suggested that Brexit will inspire banks to take a more local approach in Europe too. "After Brexit, we think we will be more local than we have been before in Europe and competing more with European banks than in the past," he said. He added that BofA has been "winning wars" and seizing market share from European banks (ie. Deutsche) in areas like prime brokerage, where its balances are up 40% in the past 18 months.

Marty Chavez, Goldman's CFO, presented at the conference after Montag. Chavez reiterated Goldman's plan to increase revenues by $5bn, as outlined by COO Harvey Schwartz last month.  Chavez emphasized Goldman's intention of penetrating new markets where clients don't see GS as a core "liquidity provider" and confirmed that Goldman intends to increase its interaction with equities quant funds. He also updated figures underlining Goldman's strategy of moving jobs out of London, New York and Hong Kong and into Bangalore and Warsaw. If you want to get hired at GS in 2018, it will help not to be in one of the world's financial capitals.

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