US Treasury Secretary Janet Yellen is warning European banks who continue to operate in Russia: leave or face heavier sanctions.
Yellen alluded to the possibility of imposing tighter sanctions on banks aiding Russia’s still-ongoing war efforts.
In a statement addressed to the G7 finance leaders, Yellen highlighted the risks of continuing to operate in Russia amid a years-long war. The potential consequences for banks found involved in helping out Russia are severe.
European Central Bank policymaker Fabio Panetta wasn’t shy about asking Italian banks to do the same.
Both Raiffeisen and UniCredit face mounting pressure from government officials to pull out its operations in Russia.
As for Yellen, the best way to understand her stance is through context: the United States wants banks out of Russia so that they can’t help the country avoid sanctions. Raiffeisen, in particular, recently received a warning for transacting with a sanctioned Russian tycoon.
Ultimately, this is easier said than done. Russia might be fighting a war right now, but citizens still live there. Not to mention, the Russian government continues to strike deals for alternative sources of military acquisition, including China, the United Arab Emirates, and Turkey.
Nevertheless, unless the banks listen to their advice, don’t expect the United States to stop.