Western banks risk losing $120 billion to Russia's debt

 Russia owes Western banks $120 billion. It will be difficult for them to regain that number in the context of the Ukraine war and sanctions against Moscow.

According to CNN, Goldman Sachs is the first major Western bank to withdraw from Russia after the country's military campaign in Ukraine. That action is likely to be followed by tens of billions of dollars in losses.

The Wall Street giant said on March 10 that it was "reducing its business in Russia to comply with regulatory and licensing requirements".

The decision to leave Russia comes after a race against time by Western banks to tally their exposure to Russia, to gauge the impact of sanctions that cover most of the financial system. country, including the central bank and leading commercial lenders such as VTB and Sberbank.

It also comes after Western businesses pulled out of every other sector of the Russian economy, and when credit rating agencies warned that a Russian default was imminent.

International banks lend more than $121 billion to Russian entities, according to the Bank for International Settlements (BIS), which suspended Russia's membership on March 10. European banks lent more than $84 billion, of which French, Italian and Austrian banks had the highest debt, and American banks owed Russia $14.7 billion.

Goldman Sachs (GS) previously revealed that it lent Russia $650 million in December 2021.

Other banks may soon follow Goldman Sachs out of Russia. Meanwhile, Kremlin spokesman Dmitry Peskov said on March 10 that the economic situation in Russia was "totally unprecedented" and blamed the West for an "economic war". Moscow has pledged to retaliate against the sanctions, and some banks say their assets could be confiscated or nationalized by the Kremlin.

Credit rating agency Fitch Ratings has warned earlier that the asset quality of large Western European banks will be pressured by the impact of Russia's military action in Ukraine, and their activities are also affected. face the increased risk of having to comply with international sanctions.

Bank of France Societe Generale (SCGLF) said last week it was "strictly following all applicable laws and regulations and is actively taking the necessary measures to strictly enforce international sanctions". as soon as they are published”.

Societe Generale said it had nearly $21 billion in Russia-related assets at the end of last year. However, the French bank insists it "has plenty of buffer zones to accept the consequences of a potentially extreme scenario whereby the group will be stripped of its ownership of its banking assets in Russia". .

French bank BNP Paribas said on March 9 that its exposure to both Russia and Ukraine totaled 3 billion euros ($3.3 billion).

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