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Thread: Russian companies withdraw billions from west, say Moscow bankers

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    Russian companies withdraw billions from west, say Moscow bankers

    Russian companies withdraw billions from west, say Moscow bankers - FT.com

    Russian companies are pulling billions out of western banks, fearful that any US sanctions over the Crimean crisis could lead to an asset freeze, according to bankers in Moscow.

    Sberbank and VTB, Russia’s giant partly state-owned banks, as well as industrial companies, such as energy group Lukoil, are among those repatriating cash from western lenders with operations in the US. VTB has also cancelled a planned US investor summit next month, according to bankers.

    The flight comes as last-ditch diplomatic talks between Russia’s foreign minister and the US secretary of state to resolve the tensions in Ukraine ended without an agreement.

    .................
    The economic fallout from the crisis has begun. But Russia has over 400 billion in reserves. Those assets will be strained.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by MildSteel View Post
    Russian companies withdraw billions from west, say Moscow bankers - FT.com



    The economic fallout from the crisis has begun. But Russia has over 400 billion in reserves. Those assets will be strained.
    Don't underestimate the significance of this. Up until now there has been a mass exodus of funds to the West, and out of Putin's hands. Could this be another reason for this incursion? To teach the rich oligarchy that they dare not desert mother Russia?

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by iguanaman View Post
    Don't underestimate the significance of this. Up until now there has been a mass exodus of funds to the West, and out of Putin's hands. Could this be another reason for this incursion? To teach the rich oligarchy that they dare not desert mother Russia?
    That's an interesting notion. It would be nice if you could provide a link supporting the flight of funds to the West.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Lavrov: Kerry made no threat of sanctions in talks - ITV News
    Russia's Foreign Minister Sergei Lavrov has said US Secretary of State John Kerry made no mention of a threat of sanctions during the pair's private talks over the Ukraine crisis earlier today.

    Mr Lavrov said he was aware of the reports of sanctions, which claim the US and EU are planning to freeze the assets and block the travel of up to 130 Russians if the Crimea referendum goes ahead on Sunday.

    Mr Lavrov said such sanctions would be "counter-productive" and would not contribute to the countries' mutual interests.
    Perhaps what they talk about in private is opposite what they say in public.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by MildSteel View Post
    That's an interesting notion. It would be nice if you could provide a link supporting the flight of funds to the West.
    Ukraine: US bonds pullout | Kitco News
    "Ukraine: US bonds pulloutGuardian (UK)
    By By Phillip Inman
    Saturday March 15, 2014 12:00 AM

    Financial markets were on high alert last night over the Ukraine crisis amid speculation that the Kremlin had pulled its vast US treasury bill holdings out of New York .

    News that more than $100bn had been shifted out of the US in the past week - at least three times more than at any time since the financial crisis - prompted fears that Russia is preparing for a western backlash in the form of sanctions and is moving its funds to safe havens beyond US influence.

    The bills were transferred out of the US central bank's deposit vaults last week, as the Obama administration increased the threat of sanctions in response to the growing crisis in east Ukraine . Analysts said that if the switch can be credited to Russia , it represents about 80% of the country's holdings in US Treasury bonds.

    The Russian central bank is likely to be behind the move, though wealthy Russian business figures are also expected to be concerned that Washington -imposed sanctions will freeze funds they have parked with the US central bank. Alexei Miller , the boss of energy firm Gazprom , and Igor Sechin , who runs oil company Rosneft, are likely to be among the many senior figures in Moscow adversely affected by any targeted sanctions imposed on Russia ."

    Is Russia Cashing In On Its US Treasury Holdings? | Kitco Commentary
    "Is Russia Cashing In On Its US Treasury Holdings?
    Friday March 14, 2014 14:13


    Could Russia be cashing out on its U.S. Treasury holdings? Concerns over rising political tensions between the Russia and the West over the Ukrainian crisis have helped boost gold prices to their highest level in six months, as investors rush for cover into the traditional safe-haven asset.

    U.S. Treasury securities held in for foreign official and international accounts slid $105 billion in the week ending March 12, according to a Wall Street Journal report. The decline was the largest retreat on record. As of December 31, both official and private Russian holdings totaled $138.6 billion of Treasury debt, the report said.

    Some market watchers wonder if Russia is moving funds out of U.S. Treasury bond holdings into other accounts that it would be able to access in case economic sanctions are imposed over the current Ukrainian crisis. Moving a billion dollars is serious business, and this situation remains on edge. All eyes will be focused on the Crimean referendum on Sunday as citizens there vote on potential secession from the Ukraine in order to join Russia.

    What does this show about gold? Gold is still reacting in its traditional safe-haven manner. Investor flows are returning to the gold market. Bullish sentiment is climbing. The yellow metal has posted a stunning and some would say surprising rally move since the start of 2014. There are many potential factors supporting the up move, including a spate of weaker-than-expected data in the U.S. throughout the first quarter, weakness in the U.S. dollar index and most recently safe-haven buying from the Ukrainian crisis."

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by Moot View Post
    Lavrov: Kerry made no threat of sanctions in talks - ITV News


    Perhaps what they talk about in private is opposite what they say in public.
    A lot of what is said in public is for public domestic consumption. When you think about it, Europe's economy is very fragile right now. Substantial sanctions would likely trigger a disruption in gas supplies, which would damage Europe's already fragile economy, although Russia will bear the brunt of the pain. Unless this issue get's extreme. I don't think we will see any substantial sanctions as a result.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by DaveFagan View Post
    Ukraine: US bonds pullout | Kitco News
    "Ukraine: US bonds pulloutGuardian (UK)
    By By Phillip Inman
    Saturday March 15, 2014 12:00 AM

    Financial markets were on high alert last night over the Ukraine crisis amid speculation that the Kremlin had pulled its vast US treasury bill holdings out of New York .

    News that more than $100bn had been shifted out of the US in the past week - at least three times more than at any time since the financial crisis - prompted fears that Russia is preparing for a western backlash in the form of sanctions and is moving its funds to safe havens beyond US influence.

    The bills were transferred out of the US central bank's deposit vaults last week, as the Obama administration increased the threat of sanctions in response to the growing crisis in east Ukraine . Analysts said that if the switch can be credited to Russia , it represents about 80% of the country's holdings in US Treasury bonds.

    The Russian central bank is likely to be behind the move, though wealthy Russian business figures are also expected to be concerned that Washington -imposed sanctions will freeze funds they have parked with the US central bank. Alexei Miller , the boss of energy firm Gazprom , and Igor Sechin , who runs oil company Rosneft, are likely to be among the many senior figures in Moscow adversely affected by any targeted sanctions imposed on Russia ."

    Is Russia Cashing In On Its US Treasury Holdings? | Kitco Commentary
    "Is Russia Cashing In On Its US Treasury Holdings?
    Friday March 14, 2014 14:13


    Could Russia be cashing out on its U.S. Treasury holdings? Concerns over rising political tensions between the Russia and the West over the Ukrainian crisis have helped boost gold prices to their highest level in six months, as investors rush for cover into the traditional safe-haven asset.

    U.S. Treasury securities held in for foreign official and international accounts slid $105 billion in the week ending March 12, according to a Wall Street Journal report. The decline was the largest retreat on record. As of December 31, both official and private Russian holdings totaled $138.6 billion of Treasury debt, the report said.

    Some market watchers wonder if Russia is moving funds out of U.S. Treasury bond holdings into other accounts that it would be able to access in case economic sanctions are imposed over the current Ukrainian crisis. Moving a billion dollars is serious business, and this situation remains on edge. All eyes will be focused on the Crimean referendum on Sunday as citizens there vote on potential secession from the Ukraine in order to join Russia.

    What does this show about gold? Gold is still reacting in its traditional safe-haven manner. Investor flows are returning to the gold market. Bullish sentiment is climbing. The yellow metal has posted a stunning and some would say surprising rally move since the start of 2014. There are many potential factors supporting the up move, including a spate of weaker-than-expected data in the U.S. throughout the first quarter, weakness in the U.S. dollar index and most recently safe-haven buying from the Ukrainian crisis."
    Wow! 100 Billion! That's amazing. I didn't know that much money could be moved so fast.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by MildSteel View Post
    A lot of what is said in public is for public domestic consumption. When you think about it, Europe's economy is very fragile right now. Substantial sanctions would likely trigger a disruption in gas supplies, which would damage Europe's already fragile economy, although Russia will bear the brunt of the pain. Unless this issue get's extreme. I don't think we will see any substantial sanctions as a result.
    I agree. I don't think Europe has the stomach to put sanctions on Russia....unless the US provides incentives for them to do so

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Quote Originally Posted by Moot View Post
    I agree. I don't think Europe has the stomach to put sanctions on Russia....unless the US provides incentives for them to do so
    Yep. Like you say public talk is probably different from what's going on in private. I think this guy pretty much sums it up.

    Why the threat of economic sanctions doesn't scare Russia - CBS News

    The United States is working on unspecified economic sanctions against Russia, but there's not much support from the allies.

    The threat of economic sanctions has not kept Russia from taking a tighter hold on Ukraine's Crimean Peninsula.

    Will Sparks is an analyst with the Eurasia Group, a leading political risk consultancy. Does he think the U.S. and Europeans are willing to let Putin keep Crimea?

    "I don't think they much of a choice," Sparks said.

    "The Europeans don't want a direct confrontation with the Russians because Europe draws 28 percent of its natural gas from Russia," he said.

    Two-thirds of that gas travels in pipelines through Ukraine.

    Germany gets 36 percent of its gas from Russia, Italy 27 percent, France 23 percent. The U.S. has little economic leverage; only 2 percent of its trade is with Russia.

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    Re: Russian companies withdraw billions from west, say Moscow bankers

    Well when the US and EU foolishly, imo, telegraph in advance their intentions, of course people are going to do what they can before the deadline hits to save what they can. If freezing assets is the plan, probably should keep that part under wraps until you're effectively already doing it.
    jallman: "It's all good. At least you have a thick skin and can take being poked fun back at without crying. "

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