Europe’s banks’ retreat from Moscow is entering its final stage, but instead of having General Winter at their heels, they have the European Central Bank.
The ECB is tightening the screws on the last significant banking presences in Russia. It’s one element of a multi-faceted, if unevenly applied, strategy of withdrawing western capital and western expertise from an economy that has been mobilized to support the biggest act of aggression on the continent in 80 years.
Last week, Austria’s Raiffeisen Bank International, by far the largest European bank still operating in Russia, said it expects to receive a binding requirement from the ECB to accelerate the reduction of its business there, while Reuters reported that Italian-based Unicredit was bracing for a similar letter. Both banks declined to comment for this article.
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It’s ridiculous that this takes so long. Money is extremely mobile according according to the field. Why is this taking so long?
This is the best summary I could come up with:
And Dutch-based ING, whose local corporate banking unit had flourished as it accompanied industrials such as Heineken and Shell into the former Soviet Union, has likewise cut its cross-border exposure by over 80 percent to only €1.3 billion as of February.
The new timeline threatens its plans to salvage anything from what was for years the biggest and most respected foreign-owned retail bank in the country, an operation that at times generated over half of the group’s profits.
Raiffeisen has attempted to exit by swapping the equity in its local subsidiary for a holding in construction company Strabag, which is based in Austria and focuses on central and eastern Europe.
Raiffeisen’s fate contrasts sharply with that of Société Générale, which within four months of the invasion had agreed to sell its local operation, Rosbank, to the Interros holding company of another metals tycoon, Vladimir Potanin.
Letters to MEPs as far back as June last year suggest that the supervisor had already indicated it expected the banks to downsize in Russia sharply, warning of “reputational risks” for those who continued.
Peterson Institute fellow Nicolas Véron noted the move reflects the fact that just staying in Russia in any shape now “represents a threat to a bank’s franchise and the integrity of its management.”
The original article contains 911 words, the summary contains 212 words. Saved 77%. I’m a bot and I’m open source!
