Translated material
Cure for the crisis
Russia will help Merrill Lynch make money
Former New York Stock Exchange CEO John Thain (pictured) made his first international visit as chairman of the board of directors and chief executive officer of Merrill Lynch to Russia and personally attended the opening of the bank's new office. The interest of one of the largest global investment banks in Russia is easily explained - Merrill Lynch, like many other banks, suffered significant losses due to the financial crisis ($9.8 billion), and it is now possible to make up for lost time only in emerging markets that are not so dependent on what is happening in the USA.For a long time, Merrill Lynch had only a representative office in Russia, although its main competitors in the world - Morgan Stanley and Goldman Sachs - had already taken full advantage of all opportunities to develop their business, having all the necessary licenses from the Federal Financial Markets Service. Only in March last year the company received a license to carry out brokerage and dealer activities in Russia, and the bank will still need a lot of time to build a business. However, according to some indicators, the bank already has good results. In particular, Merrill Lynch is a leading advisor on mergers and acquisitions. In 2007, he acted as a consultant in 29 transactions totaling $64.3 billion, which is 32.6% of all transactions on the Russian market.
Russia will become one of the few countries where Merrill Lynch intends to increase its staff. As Mr. Thain said yesterday at a meeting with journalists, Russian business is now a priority for Merrill Lynch. The question is whether the investment bank will be able to take a leading position in this market. Now many of its competitors are increasing their focus on Russia, believing that this is where investment banking services will be in demand. Yesterday it became known that the Federal Financial Markets Service issued a license for a professional participant in the securities market to carry out brokerage and dealer activities to the Russian subsidiary of the American investment bank Lehman Brothers. Previously, the bank announced plans to provide a full range of investment services in Russia.
For domestic companies, the emergence of such large players will only be beneficial. We can only hope that the hopes of investment banks will be justified and Russia will truly become one of the few islands of stability on whose economy the global financial crisis will not have a devastating impact.