The article discusses the potential for severe sanctions against Russia in response to its invasion of Ukraine. The biggest Russian banks could be targeted, including Sberbank and VTB, which are heavily exposed to foreign markets and have significant assets abroad. The article notes that the US has used a tool to block Russian companies from converting rubles to hard currency through the dollar clearing system, overseen by the Federal Reserve.
The sanctions could have significant consequences for Russia’s economy, including:
- A severe impact on the ability of Russians to trade with the West or raise funds on capital markets
- A profound effect on the Russian economy
- A big mess in Russia and a huge fallout for European banks
However, some experts argue that removing Russia from Swift should be a last resort, as it could have unintended consequences.
