Sorry for the long quote but this is in the Guardian’s live feed and not in a story I can link to. But I find it very interesting:
Russia has become a “global economic and financial pariah”, a senior US administration official told the Guardian’s diplomatic editor Julian Borger.
Speaking after western allies announced new financial measures against Russia, including the removal of some Russian banks from the Swift global payments network, the official said the measures were designed to target the Kremlin and individuals tied to the Russian government.
“We’ll go after their yachts, their luxury apartments their money and their ability to send their kids to fancy colleges in the west. We will also engage other governments, so as to detect and disrupt the movement of ill-gotten gains, and deny these individuals their ability to hide their assets in jurisdictions across the world,” the official said.
They said that all 10 of Russia’s largest financial institutions had now been subjected to sanctions – “holding nearly 80% of the Russian banking sector’s total assets”.
As a result, the official said: “Russia’s government borrowing costs have more than doubled to almost 17%. The S&P credit rating agency has downgraded Russia to junk status. Within 24 hours of our actions the demand for cash in Russia spiked 58 fold, according to reports, and the Russian government scrambled to deplete its own resources to try and shore up its banks and its currency. In short, Russia has become a global economic and financial pariah.”
Russia has been reported to have $630bn in financial reserves stored abroad, in gold and cash, but the new sanctions would render that fund useless, the official said.
“You heard about fortress Russia, the war chest of $630bn of foreign reserves,” they said.
“It’s impressive, but it’s only impressive if Russia can use those reserves. And that means Russia has to be able to sell those reserves and buy rubles to support its currency. And so what we’re committing to do here is to disarm the central bank. And the way we can do that, for example, is by banning US, EU UK, persons from selling rubles to the Central Bank of Russia. That means very simply, the Russian Central Bank can’t support the ruble, full stop, and that means our sanctions will have much greater force.”
The US official said the list of Russia banks to be removed from Swift will ultimately be decided by the EU, but said the US would “work very closely” with European countries “to finalize that list”.