Banks warn against EU plan to redistribute Russian assets

European Union leaders are discussing a plan to use up to €3 billion a year to supply arms to Ukraine as they try to bolster the country's fight against Russia, which would still own the underlying frozen assets.

More than 3.5 million Russians have frozen assets abroad worth around 1.5 trillion roubles , Russia's Finance Minister Anton Siluanov said last year.The Belgium-based central securities depository, which counts some of the world's largest banks as shareholders, will also be permitted to temporarily retain 10% of the profits on stranded Russian assets as a safeguard against litigation.

One source warned of the precedent this proposal would set and the"weaponisation of foreign-held reserves and assets". "As far as banks go, I think they're right to be concerned because we have already seen huge amounts of civil litigation in relation to sanctions," said Mr Feldberg, who is not currently directly involved in any lobbying.Russia has said that any confiscation would be a blow to property rights, harm confidence in Western bonds and currencies and torpedo trust between central banks.

"...this proposal is not going to represent the end of this story but more likely the latest salvo in a perennial debate about the nature of sanctions and their appropriate role in the global financial system," he said.

Source: News Formal (newsformal.com)

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