ABSTRACT
This is a famous quotation from the report on the economic situation of Austria written by Charles Rist and Walter Layton directed to the League of Nations in the mid 1920s. It describes the significance of Vienna as a financial centre before World War I or better it stresses the central and dominating role of the banks in the Habsburg Monarchy’s financial system. Most historians would agree. What is certainly true is that it was the Austrian banks that were heavily involved in financial transactions and operations, while the Vienna stock exchange did not mirror that significance to the same extent. Defining financial centres as ‘urban locations specialising in the provision of financial services’,2 the purpose and function of financial centres is financial intermediation, and this task in the Austrian case was mainly concentrated upon the banks. The question is: Why was this so?
