Departure of key firms raises concerns in Chicago business sector and beyond
What three things do DRW, IMC, CME, Cboe, have in common? They are some of the most prominent financial derivatives companies in the country. They are all headquartered in Chicago. They are all considering leaving Chicago.
These companies together make trillions of dollars a year in trades. Most have been in Chicago for decades. They've created thousands of jobs in the Windy City's $75 billion finance sector.
Now however, Chicago, historically a finncial and trading powerhouse, is facing a severe threat as this trillion-dollar industry that has long helped power the city's economy teeters on the brink of leaving. This is primarily due to the mayor's proposal which involves $800 million in taxes. This is needed to deal with a budget deficit that has grown to half a billion dollars and will likely continue to grow with inflation and the large number of migrants that have come to Chicago with no means of support and no money.
One way of doing taxing companies such as these that is being considered is to place a levy on financial transactions. This has these firms extremely alarmed, especially as they are already concerned with the increase in crime which shows no signs of reversing.
For the first time these firms, which are usually competing, have joined forces to press their case with local policymakers. They are sharing data to explain just how big the financial benefits of their presence in Chicago are. While none have overtly threatened to leave, private talks make it evident that they will likely leave Chicago if the financial transaction tax passes and if crime remains a problem.
“We don’t want to leave,” said Ed Tilly, CEO of Cboe Global Markets Inc. “But we cannot be in a position where we are disadvantaged in the most competitive markets in the world, where our competitors don’t face the same economics that we would.”
Mayor Johnson’s said that he hasnt made the decision yet on imposing a transaction tax and that he is open to discussions with companies.
Yet, the potential exodus of these financial firms is a matter of grave concern for Chicago's economy. The city has long been a hub for trading and finance, contributing significantly to its revenue and job market. The departure of these firms threatens to erode the city's financial stability.
Local leaders are now facing the challenging task of retaining these crucial firms while addressing the factors that have prompted their exit. The future of Chicago's financial dominance hangs in the balance as city officials work to prevent further departures. It remains to be seen if they can manage to do enough about crime to make a difference and whether something can be worked out regarding the Mayor's proposed taxes that would directly impact these companies.