Bank run in Russia - Putin's financial system collapsed?

 

Bank run in Russia - Putin's financial system collapsed?

Western sanctions are causing Russians to lose faith in Russian banks, something that should worry Putin

Russian ATM lines are long: many Russians have lost confidence in financial institutions on the West's sanctions list. This threatens the stability of the financial system in Russia.

Russian banks have been excluded from international payment transactions following the Russian war of aggression against Ukraine. In addition, dollar reserves at the Russian central bank have been frozen, despite assurances from the central bank that they will remain so.

The Russian banking system has been hit particularly hard by which sanctions?

Most of the media attention has been focused on the sanctions against seven Russian banks that are now being excluded from the Swift international payment system. In the EU Official Journal published on Wednesday, VTB Bank is listed as one of the seven banks.

Among the largest banks in the country are VEB, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, and Sovcombank.

As part of the package of measures, Gazprom Bank, which manages the oil and gas business of the Gazprom energy group, and the country's largest bank, Sberbank, have not yet been sanctioned. The seven sanctioned banks will have ten days to close their Swift connections.

In some cases, companies may have difficulty sending payments abroad

The Swift network is used to complete payments to and from foreign countries, so the step will affect many Russians and Russian companies in their everyday lives.