RUSSIAN OFFICIALS ARE nothing if not optimistic. Take this choice assessment of the prospects for the Russian investment banking industry from finance minister Alexei Kudrin. In early October, in an interview with Russian business daily Vedomosti, he charted the development in the relative fortunes of US and Russian investment banks in the following terms: "Five leading US investment banks are no longer what they used to be. Bear Stearns was sold, Lehman Brothers went bankrupt. Merrill Lynch was sold, Goldman Sachs and Morgan Stanley abandoned their status as investment banks because of the risks they had taken and because of the need to receive additional support from the Federal Reserve. Soon our Renaissance Capital may become the biggest investment bank in the world."
While the US investment banking industry has undoubtedly taken an unprecedented battering in recent months, there’s certainly no sense of Schadenfreude among the Muscovite investment banking community. After enjoying a golden earnings period in recent years on the back of a rapid rise in capital markets issuance and M&A activity, Russian investment bankers are under no illusions about the size of task facing them if they are to ride out an economic and market downturn in Russia that threatens to completely choke off the supply of lucrative mandates.