In what could mark the start of a round of competition among Wall Street firms for new-product talent, Christopher Hogg last week left Goldman Sachs & Co. to join Merrill Lynch & Co.

Mr. Hogg, 39, was the inventor of trust-preferred securities, which made a big splash in the banking sector last year after the Federal Reserve approved their use to raise regulatory capital.

Mr. Hogg started on Monday and reports to Harish Raghavan, head of global new product development at Merrill.

Goldman became one of the bigger players in the trust-preferred securities market, which blossomed to $15 billion and generated $150 million in underwriting fees for investment bankers in just the last two months of 1996.

Merrill Lynch said that hiring Mr. Hogg will increase the division's ability to find more "tailored solutions for corporate global clients."

Mr. Raghavan said that the market for new bank products overseas and in the United States could be as high as $25 billion a year.

"A lot of our business is dealing with capital issues for the banks on the liability side," he said, adding that about 50% of the division's clients are foreign or U.S. banks.

The division expects to bring on more people from the United States and other countries in the early part of this year, said Mr. Raghavan.

Some Wall Street observers say that the climate is right for investment bankers with new product experience to cast around for new firms and higher pay.

"When products are hot, there is movement among investment bankers," said ratings analyst Thomas Stone of Duff & Phelps Credit Ratings. "The popular products and the people associated with those products are more likely to be sought out. Back in 1994, when loan syndication was popular, investment banks attracted people from commercial and investment banks."

When Mr. Hogg went to Merrill "it definitely was a big move," one investment banker added. "Clearly the investment product guys are in high demand."

Others were skeptical, however, that the popularity of the trust preferreds will lead to a significant building of new product divisions.

"Lehman, Merrill, Goldman have had a number of professionals devoted to product development involving preferred stock and capital securities over the past several years, and this effort will certainly continue at least at Lehman," said Neil Sherman, managing director in charge of preferred securities originations at Lehman Brothers Inc.

And others note that activity in the new products circles could be a seasonal phenomenon. Many investment bankers tend to make their career moves in January after they have received their bonuses.

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