Though most of Russia’s territory belongs in Asia, it would be difficult to characterize Russian finances as “Asian.†Most of the dirty work is done in the financial centers of Moscow, but in the past year and a half under the “rising dollar†paradigm, Russian financial existence may be more Asian than geography alone might permit. The similarities are perhaps deeper and more aligned than most seem to realize, a desperate proposition at this particularly moment in financial history.
Several years ago, Russian authorities made a very concerted effort to turn what might have been viewed as backward, secretive and banana republic-type banking and funding markets into if not Western-style powerhouses than at least accessible to those interests. On the outside, it appeared as if Russia was trying to modernize in order to be competitive within the current financial order. The Russian government went to great lengths to make it happen, including a building boom in Moscow pre-made with which to house its outwardly intended financial standing.
To do all that, city leaders are inviting business to glittering new skyscrapers, including the Mercury City Tower, which at 75 stories is the tallest building in Europe.
“The idea is to upgrade the position of Moscow in ratings, to become closer to the leaders of innovation and to the big boys of international financial centers,†Andrei V. Sharonov, the deputy mayor for economic affairs, who led a roadshow tour promoting the city in Asia, said in an interview.
That was early 2013, toward the end of what was believed then at least a moderately successful effort and a more stable global financial environment before the events of that summer. The Russian government, in both Medvedev and Putin, had built up the infrastructure and had made all the “right†contacts:
Mr. Medvedev had named senior Western bank executives to an advisory council for transforming Moscow’s financial sector. They included Jamie Dimon, the chief executive of JPMorgan Chase; Vikram S. Pandit, the former chief executive of Citigroup; and Lloyd C. Blankfein, the chief executive of Goldman Sachs.
Ostensibly, especially in media commentary, it seemed as if Russia was out to gain financial status with which to compete with larger regional financial centers, especially the other oil states in the Middle East. The assumed goal was to get Russia’s economy out of strictly the oil and gas business and more so on board with the US and UK’s prime exports the past four decades: financial innovation. To that end, the Russians hardly moved the needle, as volume and banking activity scarcely displaced anyone. As the article quoted above pointed out, the Global Financial Center Index still ranked Moscow 65th out of 79 cities.
