The Vienna Stock Exchange. Architect: Theophil Hansen, 1874-1877

The Vienna Stock Exchange was founded in 1771 by Empress Maria Theresia as one of the first stock exchanges in the world. Gradually the Vienna Stock Exchange developed into the central capital market of the Habsburg Empire. Originally only government bonds and currencies were traded and the building was open to the public. On some days up to 2,000 people were present. In 1818 The Austrian central bank was the first public limited company that was quoted on the Vienna Stock Exchange. Due to the industrialisation and economic boom in the Habsburg Empire in the course of the 19th century the stock exchange gradually gained international reputation. Consequently a host of companies issued shares there. Due to the empire’s liberal economic policies in the second half of the 19th century unfortunately several unstable businesses were financed via a share issue there, which led to a wave of speculation that culminated in the stock exchange crash of 9th May 1873. In the course of this stock exchange break down nearly half of the public limited companies quoted there disappeared. The recovery took a long time and in the meantime trade was mainly in government bonds. That was the return of the big banks as the main financiers of enterprises. These banks also dominated the capital market and stock exchange trading. Trade on the Vienna Stock Exchange started to pick up once more so that new regulation was needed to. In 1875 the third Stock Exchange Law was passed that guaranteed the complete independence of the Vienna Stock Exchange. Finally in 1877 the new building for the Vienna Stock Exchange was opened, designed by one of the famous architects of the “Ringstrasse”, Theophil Hansen. During this time of consolidation rich financiers dominated the trade in shares there and the bond market was the “playground” of the “privatiers”, the well-to-do upper middle class. During the First World War the Vienna Stock Exchange was closed. At the end of 1919 the trading floors were opened to the public again and immediately experienced a boom which ended in a crash in March 1924. In the following years the shocks of the Great Depression of 1929 greatly hampered trading there. The bankruptcy of banks and the plunge of share prices affected the trade on the Vienna Stock Exchange and the number of visitors declined drastically. Interestingly enough, the New York Stock Exchange crash in October 1929, in fact, had no direct consequences for Vienna.

The position of the Vienna Stock Exchange as the most important trading place in Central and Eastern Europe of course suffered after the disintegration of the Habsburg Empire in 1918, but many of the shares of the nation states that were created on the territory of the former Habsburg Empire, e.g. Czechoslovakia or Hungary, were still traded on the Vienna Stock Exchange. Among the 205 different shares that were traded there 75 were foreign ones in 1937. In the course of the bankruptcy of the Austrian state and the attempts at a recovery of the state finances a complete restructuring of the Austrian economy and a redistribution of wealth took place. Big banking conglomerates developed which financed the industry and incorporated parts of businesses or tied others closely to these banks. Consequently many sectors of industry left the stock exchange. In 1938 the Vienna Stock Exchange lost its independence and was subjected to the German Stock exchange Law. After the end of World War II the Vienna Stock Exchange was reopened in 1948 and in 1949 the first government “recovery” bond of the new 2nd Austrian Republic was issued there. Due to extensive nationalisation of the industry the trade in shares on the Vienna Stock Exchange suffered in the first years, but bond trading recovered quickly after the currency reform of 1952. In the 1960s trading gradually picked up and foreign shares were again traded there, but all on a very small and insignificant scale until the 1980s. In 1956 a fire destroyed the historical great trading floor, which was never restored. Yet the building was reopened in 1959. Today there is no more trading on trading floors at the Vienna Stock Exchange; all trading is electronically.

Just before and immediately after the fall of the Iron Curtain, Austrian Banks expanded into the transformation economies in Central and Eastern Europe. Business was booming and profit margins were higher than in Western Europe due to a favourable cost structure and higher margins in all business fields. Moreover, experts predicted a much higher demand for credits in this area – twice as high as in the old EU15 countries. Due to competitive pressure, the Vienna Stock Exchange attempted a closer cooperation with stock exchanges in the region in the following years. They started with a co-operation with the Frankfurt Stock Exchange: The Vienna and the Frankfurt stock exchanges owned 50 per cent each of the New European Exchange NEWEX, an Eastern European bourse, founded in Vienna as a quality market for shares of Central and Eastern European businesses. NEWEX failed in 2002 and by that illustrated the risks of this Central European strategy. In 2004 the Vienna stock exchange and Viennese banks bought the Budapest stock exchange. Further the Vienna Stock Exchange introduced indices for Eastern European shares; from 2002 on indices for Czech, Slovak, Hungarian and Polish shares and a CEEC index were calculated in Vienna. Still a lot of advertising and marketing and confidence building was necessary to woo international customers away from other European stock exchanges. The Vienna Stock Exchange had to be made more attractive for medium-sized enterprises in Central and Eastern Europe, for instance by reducing the high transfer costs. Although the introduction of the euro resulted in a higher liquidity in Vienna, it also withdrew customers from Vienna to bigger stock exchanges in the euro-zone with a higher liquidity. For modern stock exchange transaction the location is no longer important, but what the stock exchange can offer.


Despite an overall positive development of the financial centre Vienna it was still primarily a national financial centre and as an international centre of secondary importance. The major drawbacks were, as in the past, the low level of development of the share market and the stock exchange business. Even if some of the business were transferred from Budapest, Prague or Bratislava to Vienna, this only increased the regional importance of Vienna as a financial hub, but did not contribute considerably to its international reputation. The early fast growth rates of CEE economies helped the Vienna stock exchange a little to gain some significance due to the good business connections and acquisitions of Austrian banks in this region.

Literature: Eigner, Peter, Ein Schritt nach vorne, zwei Schritte zurück – Die wechselhafte Geschichte des Finanzplatzes Wien im 20. Jahrhundert, in: Rathkolb, Oliver / Venus, Theodor / Zimmerl, Ulrike (eds.), Bank Austria Creditanstalt. 150 Jahre österreichische Bankengeschichte im Zentrum Europas, Zsolnay 2005

Sandgruber, Roman, Traumzeit für Millionäre: Die 929 reichsten Wienerinnen und Wiener im Jahr 1910, 2013