On a crisp winter’s night, the Kremlin walls and the Moscow river can paint a romantic picture for the visitor. Bankers more accustomed to the balmy climes of the French Riviera, however, might need more persuasion to set up camp here permanently. So, should banks in London or New York bloat teams with overpaid expatriates in Moscow – one of the world’s most expensive cities – in anticipation of an investment banking boom in Russia?
Even now, indeed especially now, the Bric (Brazil, Russia, India, China) nations are a byword for the rosier prospects awaiting capitalism, outside the traditional centres. Yet some would like to take away the ‘r’ from Bric, arguing that Russia is a country more in decline than ascent.
However, if Russia’s institutions continue to crumble, investment banks can still make money in Russia in some business areas, if global demand for its vast natural resources keeps up thanks to growth elsewhere. Also, although Russia has a shrinking population, if more wealth from mineral exports is spent at home, the population will have more money to spend on consumer goods, which brings opportunities in areas such as M&A.
