Moscow’s financial centre push gets Luxembourg onside
With just half a million people, Luxembourg is one of the top international financial centres. The triple A-rated country has thousands of investment funds – their success supported by the country’s stability and compliance with international banking rules.
Landlocked Luxembourg is a wealth manager for all neighboring European countries and Fernand Grulms, CEO of Luxembourg for Finance, says Moscow could become the same financial hub for the Commonwealth of Independent States.
“A good strategy would probably be to start as a regional financial centre doing business with the surrounding countries, which also from the language skills probably are easier to communicate with, and then from this regional basis, then go a step further and become truly international.”
But experts say – Moscow cannot be a Luxembourg to the CIS. It’s not a short drive for businessmen in neighbouring countries, looking for somewhere to stash their cash. However, Russia can serve the region as a hub for project finance, mergers and acquisitions, banking and consultancy.
But first must get its own house in order. An international financial center is not just about the flow of money, but also traffic flows. Moscow is notorious for its underdeveloped infrastructure. But with its huge 25 billion euro budget it has every chance to build a modern city for the future.
So, the Russian capital should be a more attractive place for expatriates according to Yury Roslyak, First Deputy Mayor of Moscow.
“We will be developing IT technology, building office spaces, dealing with transport situation. The needs of the city are in line with the needs of the international financial center.”
The city council says Russian government still has to write or amend about 200 laws to remove obstacles on capital inflow into the country and protect investment. Even if only part of that happens – Moscow should move up the ranks of global financial centres.