US and its allies froze an estimated $280 billion of Russian sovereign asset

Soon after Russia invaded Ukraine in February 2022, the US and its allies froze an estimated $280 billion of Russian sovereign assets parked in their banking systems. 

Washington wants to seize them 

Some European governments are wary of such a move, given the potential for unintended consequences. 

Freezing an asset means it can’t be used, moved or sold, but its legal ownership doesn’t change. 

France, Germany and the ECB worry about Russian retaliation targeting European assets, and also the potential impact on financial stability and the euro’s status as a reserve currency. 

Russia has threatened reprisals that could include confiscating assets from “unfriendly” countries held in its own banks that were also frozen at the start of the conflict. 

Looming over the debate is the argument, seized upon by Russia but acknowledged by some western officials, that a massive asset grab would violate a basic principle of the global economic system — the sanctity of private property.

If countries that see themselves as champions of a rules-based order are seen to break those rules when they aren’t convenient, what message would that send to everyone else?

Bloomberg 11 March 2024

Yellen endorsement of using frozen Russian assets to fund Ukraine’s war effort



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