Creditanstalt-Bankverein: Death of a bank
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Creditanstalt-Bankverein: Death of a bank

When Austria's coalition partners horse-traded the sale of Creditanstalt in January, it spelled the end of a venerable bank. But Gerhard Randa, chairman of predator Bank Austria, sees its absorption as a chance to put an Austrian bank into the big league. Not everyone agrees. And they don't like the way Austria's politicians stitched up a deal that had nothing to do with market forces and everything to do with Viennese power games. David Shirreff reports on a very Austrian privatization. Additional reporting by John McGrath.

The 17-point agreement of January 12

Stages in Creditanstalt's "privatization"



January 11 was the night of Bank Austria's annual ball in the Rathaus, Vienna. The bank's chairman, Gerhard Randa, was in good form and showing as much excitement as this reputedly cold, calculating man can.

He knew that only 400 metres away in a smoke-filled room at the federal chancellery, Austria's coalition politicians were hammering out a deal. If it went his way it would make him undisputed number one banker in Austria.

In the 19th district of Vienna another bank chairman, Guido Schmidt-Chiari, waited nervously at home. After his six-year often single-handed battle to keep the 140-year-old Creditanstalt-Bankverein independent, those politicians were about to decide its fate. Would it survive as a partner in a complex consortium of financial and industrial companies, or would it be bought and ultimately swallowed by Randa's Bank Austria? He expected a summons for last-minute discussions or at least to be told how they had decided.

The meeting had started at 3pm. Chancellor Franz Vranitzky and his finance minister, Viktor Klima, both of the socialist party (SPÖ), and Vienna finance chief Robert Edlinger, were head-to-head with their coalition partners, deputy chancellor Walter Schüssel, economics minister Johann Farnleitner and conservative People's Party (ÖVP) chief whip Andreas Khol.



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