(FT) The European Central Bank has told the banks under its jurisdiction having exposure to Russia to expect international sanctions if Moscow attacks Ukraine.
Banks such as Citi in the US, Italy’s UniCredit, and France’s Société Générale are considered to have large Russian exposure, with the ECB’s warning likely to affect them if sanctions are imposed against Moscow.
ECB has also requested information on banks such as Deutsche Bank and ING on their level of exposure in Russia and Ukraine.
The officials in the European Union now seek reassurances from its banks on how they will handle the different scenarios, such as the denial of the Swift international payments system.
An unnamed ECB bank executive has cited the Russian investment banking operations as the main risk for the sanctions as it deals with big multinationals and oligarchs. The executive says the Russian central bank plans to activate the domestic interbank payment system if Swift is discontinued.
Additional risks have been cited, such as the potential for the rout on the rouble, which could reduce the equity value held in Russian units.
Customers of retail banks, which include individuals, corporates, and private entities, have also been said to be at risk of the sanctions as they some control sizable private wealth management units.
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