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February 24, 2022

ECB asks lenders to report exposure to Russia amid Ukraine crisis

The European Central Bank (ECB) has asked lenders to report on the risks they face due to the rising geopolitical tensions between the West and Russia over Ukraine, Bloomberg reported citing sources.

The ECB is assessing banks’ liquidity, loan books, currency positions, trading, and their ability to keep operating, the sources said.

It wants banks to assess scenarios such as severe economic sanctions and consequences of the Russian invasion on Ukraine, they added.

As per the data from European Bank Authority, France’s Societe Generale, Italy’s UniCredit and Austrian banking group Raiffeisen Bank International are among those with exposure to the Russian market.

ECB spokesperson said that the regulator is closely watching the developments and is in touch with banks and regulators on the risks posed by the situation.

Notably, the US and UK governments have already imposed the ‘first tranche’ of sanctions on several Russian Banks and individuals after Moscow recognised Donetsk and Luhansk in eastern Ukraine as independent.

The ECB and lenders are trying to analyse the impact of the sanctions, the sources said adding that the ECB had already identified the risk-prone lenders in Russia and Ukraine.

The lenders are figuring out ways to respond if more sanctions are imposed on other Russian financial entities and the economy.

Wider sanctions could result in losses on loans to companies and individuals or impact the bonds and stocks that the lenders trade, one of the sources noted.

In the sanctions announced earlier this week, Rossiya, IS Bank, General Bank, the Black Sea Bank, VEB bank and Russia’s military bank – Promsvyazbank were targeted.

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