ECB urges banks to stop dealing with Russia
Date
5/27/2024 8:57:03 AM
(MENAFN) According to reports from the financial Times, the European Central bank (ECB) is intensifying pressure on Eurozone banks that continue to operate in Russia, urging them to expedite their exit strategies due to the looming threat of United States sanctions. The Frankfurt-based regulator has purportedly dispatched letters to these banks, requesting comprehensive "action plans" outlining their withdrawal from the Russian market as soon as next month.
Several prominent Eurozone banks, including Austria's Raiffeisen Bank International (RBI), Italy's UniCredit, Dutch lender ING, Germany's Commerzbank and Deutsche Bank, Hungary's OTP Bank, Italy's Intesa SanPaolo, and Sweden's SEB, have maintained a presence in Russia despite the imposition of Western sanctions over the Ukraine conflict.
Recent scrutiny from United States financial authorities has heightened concerns for Eurozone banks operating in Russia. Reports indicate that UniCredit and RBI, with decades-long operations in Russia, have faced increased regulatory scrutiny from United States authorities, including threats of potential exclusion from the American financial system.
The regulatory pressure intensified last week when Raiffeisen Bank International, based in Vienna, abandoned a proposed asset swap deal involving holdings linked to Russian billionaire Oleg Deripaska. The collapse of this agreement underscores the growing influence of United States authorities in shaping European banks' business decisions related to Russia.
Concerns within the ECB are mounting over the potential repercussions of United States intervention on Eurozone banks, with fears that these institutions could become targets for further regulatory crackdowns. Such developments pose a significant threat to the stability of the entire European banking system, prompting urgent action from European financial regulators.
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