U.S. Blocks Largest Russian Banks, Bans Investment In Russia
Topline
The United States banned Americans from making new investments in Russia and placed full blocking sanctions on two of Russia’s largest banks, SberBank and Alfa Bank, in a new wave of sanctions announced by the White House on Wednesday.
The U.S. targeted the daughters of Russian Prime Minister Vladimir Putin in sanctions announced … [+]
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Key Facts
The new measures are in response to emerging evidence of atrocities committed by Russia in Ukraine, the White House said, citing Bucha, the city where Russian soldiers allegedly massacred hundreds of Ukrainian civilians.
The White House also announced personal sanctions against Russian President Vladimir Putin’s daughters Katerina Tikhonova and Maria Vorontsova, responding to evidence that Putin may be hiding his assets with family members in American financial institutions, a senior Biden Administration official told reporters Wednesday.
Though the White House called the new measures “devastating,” their effectiveness was unclear: Sberbank said in a statement the penalties won’t have a “significant impact on the bank’s operations,” while Alfa Bank said it’s continuing normal business operations in Russia, though a spokesperson for the bank told Reuters it’s unclear what the impact will be on customers’ dollar holdings at the bank.
The United Kingdom also announced full blocking sanctions against SberBank and Alfa Bank on Wednesday, and the White House noted the measures are a coordinated action with the European Union and Group of Seven nations.
Key Background
State-owned Sberbank is Russia’s largest financial institution and controls about a third of Russian bank assets, while Alfa Bank is Russia’s largest private bank and was cofounded by billionaire oligarch Mikhail Fridman, who has been hit with personal sanctions by the European Union and United Kingdom but not the U.S. The U.S. has previously announced several rounds of sanctions on Russia in the wake of its invasion of Ukraine, including banning several Russian banks, but not Sberbank and Alfa Bank, from the SWIFT international financial messaging system.
Big Number
10%. That’s how much Russian GDP could contract in 2022, Goldman Sachs forecasts. A senior U.S. official claimed Wednesday the sanctions could sink Russians’ standard of living to levels comparable to the last days of the Soviet Union in the 1980s.
Further Reading
Biden Will Reportedly Ban New Russian Investments In Latest Round Of Sanctions (Forbes)
Putin’s Daughters Reportedly May Be Hit With EU Sanctions After Bucha Massacre (Forbes)