FX Team Leaves Riggs In London To Start Desk At Greek Bank

Three dealers have left Riggs AP Bank in London to start up a new FX trading desk at Ionian and Popular Bank of Greece in London, which will be upgrading from a representative office to a full branch in the near future, say bank officials.

Paul Bishop, formerly treasurer at Riggs, has moved to Ionian along with two colleagues, Brendan Lynch, chief dealer, and Bill Mitchell, deputy chief dealer. Bishop
says he has plans to hire a fourth dealer in the next few weeks.

According to Bishop, Riggs AP, a subsidiary of U.S.-based Riggs National Bank of Washington, which closed its London branch last year, is pulling out of foreign exchange and money market trading in London. At the same time, he explains, Ionian is looking to get into the field.

Bishop says that the bank, which is the third or fourth largest in Greece, is taking the opportunity offered by the deregulation of the Greek financial markets to expand abroad. Controls on foreign branches are expected to be completely lifted in the next few weeks, provided the parliamentary elections called last week do not delay matters, says Bishop. By mid-October, full deregulation of the Greek market should be accomplished, he says, as all capital controls in Greece are scheduled to be lifted "in full compliance with European Community regulations."

The drachma should then be a fully convertible currency, explains Bishop. Ionian plans to be a market-maker in spot and forward drachma, quoting major currencies to corporate clients. Eventually, he says, with a treasury team of about seven people, the bank hopes to help develop a derivatives market in drachma-related products in London. No market in drachma options, FRAs or swaps currently exists, he says.

At the moment, says Bishop, a number of Greek banks in London already quote drachma, such as the National Bank of Greece, the Commercial Bank of Greece, Ergobank, and the Private Bank and Trust. But most Greek banks, including Ionian, are nationalized.

"The drachma market is becoming a lot more liquid," says Bishop. "This is an exciting opportunity to start something new and fresh." Bishop, who was with Riggs for 22 years, says that Ionian is, like Riggs, a small foreign bank in a large market in London. But unlike Riggs, which is relatively small in the U.S. as well, Ionian is one of the bigger players in its home market and has the chance to develop a sizeable corporate client base, he says.