There is no textbook for how to use the only weapon the West really has — sanctions — to help protect Ukraine’s sovereignty. How much pain should the West try to inflict now, when Ukrainian territory has already been breached; and how much to hold in reserve should the invasion escalate? Over the past 48 hours, the U.S., EU and U.K. have scrambled to work that out.
The largest of the five banks, Rossiya Bank, is well known for its close ties to the Kremlin; even so, it represents only about 1% of bank assets in the country. “These are testing-the-water type sanctions against these five, small specialized banks,” says Elina Ribakova, deputy chief economist at the Institute for International Finance in Washington.
To cap off this show of pique on Ukraine’s behalf, the U.K. put the wrong address on its sanctions list for Rossiya Bank, noting the address of the Russian Central Bank instead. Given Rossiya is widely known as “Putin’s bank,” there was unintended irony there. But Ribakova says that it actually makes it legally tricky to implement the sanctions without the correct address.
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