EXPERT OPINION

Alexei Novikov

Head of the Moscow Division of Thomson Reuters Group

Moscow is calling out for a project like the International Financial Centre in Rublyovo-Arkhangelskoye. Banks the world over need to communicate with one another; and best practice usually sees them locating together in hubs. In Moscow, ten state banks comprise 95% of entire the banking system, and half the assets are held by Sberbank. Yet if we look at the distribution of where the headquarters of these banks are located — and, I repeat, these banks together represent our entire banking sector — we see they are scattered all around the city. As a result, each bank is living in its own ivory tower, and they have no connection to one another in urban planning terms.

The creation of a single business district in Rublyovo-Arkhangelskoye, concentrating banks, consulting, legal and other companies together in the same space, might well address much of the challenge of creating a dynamic banking environment in this country. This kind of development is logical and inevitable: over the next 15–20 years, new places that connect the country’s largest financial structures will almost certainly emerge. Banks often work together on projects: sometimes, they compete; sometimes they collaborate.

And even if you are competing, you still need to be located nearby. This is how modern business works. If we are to make a real financial centre, similar to the ones in London, New York or Singapore, and if Sberbank takes the initiative in the creation of a fully- fledged environment for the financial community, then this will be a very dynamic place, and something that feels very natural to Moscow. If you take London and New York as examples, you see that financial centres tend to have two business districts.

In London these are the territory around the London Stock Exchange and Canary Wharf; while in Manhattan there are two clusters of skyscrapers in Downtown and in Midtown. Decision makers of high status are based in Midtown; more technical operations are performed in Downtown; even the Twin Towers contained mainly back offices. Regardless, such districts are always built right into the city’s infrastructure.

Another factor to remember is that these kind of projects are only successful when they are based on a broad community buy-in on urban design rather than on aiming for a maximum return on the investment. Projects are unsuccessful if they are driven by maximising the profit margin on the immediate site on which the offices are built; what you need to do is maximise the benefits for a relatively large territory surrounding the project site, which in one way or another will fall into the project’s orbit. 

As regards best management practices, then best practice is, as a rule, self-governance. The City in London is an entirely independent structure founded on principles of private democracy, with companies and non-commercial organisations as participants. The stock market and the city also have a role to play, but it’s a form of independent non-commercial organisation that defends the interests of the players in the City and undertakes agreement processes with the city authorities. They work on a broad agenda, initiate many international programs and support comparable centres in other countries. In America, city development corporations exist alongside this type of management structure. There are many forms of self-governance in the US, and highly developed inter-municipal cooperation. Boards can include representatives from schools, transport companies and municipal services, who either form committees or are appointed to a supervising agency.

I think that this kind of organisational scheme is the most dynamic and appropriate, and I would encourage its adoption into Russian practice. Inter-municipal cooperation is becoming widespread internationally. The Greater Moscow metropolitan area requires such cooperation mechanisms: at the level of planning commissions, the main architectural authorities, the transport authorities, and so on. Even though such commissions can create heated debate requiring compromise, they can be very effective governance bodies. This system does not work by silencing conflict, but rather by airing it and moving to a consensus decision. In my view this kind of parliamentary form of executive management perfectly addresses the dynamic character of a modern metropolis.