Forget Paris and Frankfurt usurping London as Europe's preeminent financial center. How about Vienna?
A big Russian bank is considering shifting more of its of business to the Austrian capital as Britain heads for Brexit. VTB already has some operations in the city, but there are a handful of reasons why Vienna should be attractive to other firms too.
Europe can't take it for granted it will be able to provide the base for a financial center if London declines. George Osborne, former U.K. Chancellor of the Exchequer, has warned that if London loses its status after Brexit, the continent would struggle to replace it. He thinks the fintech industry might shift to California. U.S. bank bosses are more likely to move business to New York than the euro zone if they leave London, judging by the signals coming from the annual meeting of the International Institute of Finance.
So, if Europe wants its own finance hub it needs one that ticks the boxes. Vienna happens to be a pleasant city and is geographically in the heart of Europe. It's possible to imagine financiers being open to the idea of relocating there and wanting to settle there for a decent part of their careers. True, Vienna may not have London's intensely cosmopolitan buzz -- but that goes for pretty much every alternative financial center in Europe.
These factors get Vienna onto the shortlist. But its key advantage is simply that it is neither Paris nor Frankfurt. There can only be one financial center, and if the choice were only between the French and German financial business capitals then one would have to lose. It is hard to see either France or Germany calming sitting down and agreeing that the other deserves the prize. Getting things done in Europe has historically been a case of minimizing objections and finding the compromise that everyone can back.
On that basis, Vienna may be home to more than VTB one day.
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