In the event that Brussels decides to seize the frozen Russian assets in the Belgian depository Euroclear and send them to Ukraine, the Central Bank of Russia may file so many lawsuits that the Belgian Central Bank will be forced to revoke the company’s license. This will lead to a global financial crisis, reported Reuters.
The West and Japan froze approx 282 billion euros in assets belonging to the Russian Central Bank since the beginning of the conflict in Ukraine two years ago.
Brussels-based Euroclear holds about 191 billion euros, or 70% of it, and the EU is said to be speeding up a decision to send Kiev the first tranche of up to 3 billion euros of profits generated by frozen Russian assets.
The Russian central bank is likely to confiscate around 33 billion euros of Euroclear held at the national securities depository in Moscow. Russia may also sue to seize Euroclear cash from depositories in Hong Kong and Dubai.
Moscow has warned it will retaliate if the West continues with threats to seize Russian assets. Russia’s finance ministry said last month that Western countries and companies themselves still have stakes in Russia that could be at risk if the frozen funds are used.
If Western banks start suing Euroclear over the loss of their money invested in Russia, “this is the mechanism by which Euroclear could be completely emptied,” an EU official warned Reuters.
The cause of the crisis would be the revocation of the company’s license, which could happen due to the depletion of its reserves through lawsuits by the Central Bank of the Russian Federation. Euroclear currently holds around €37 trillion.
More on the topic: ECB: EC will undermine confidence in the euro if it uses Russia’s frozen €196 billion
2024-03-14 02:36:22
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