Joe Biden has delivered his first salvo in response to the increasingly fraught situation in Ukraine. Sanctions have been imposed on Russia's sovereign debt, its financial institutions and a selection of the country’s oligarchs. The UK acted earlier in the day by freezing the assets of five Russian banks and putting the squeeze on three Russian billionaire oligarchs, all confederates of Vladimir Putin.
The Russian incursion into Ukraine’s breakaway Donetsk and Luhansk regions even prompted Germany to stall certification of the controversial Nord Stream 2 natural gas pipeline – somewhat reluctantly one would imagine. The European Union (EU) also came to the aid of Kyiv by banning EU investors from trading in Russian state bonds and it could also restrict financing of new gas exploration and production in Russia.
All very exciting, but I wouldn’t be rushing out to put your tin hat on just yet. The move on the banks could conceivably reduce credit availability in Russia, but the UK sanctions were not directed at the country’s four largest state-owned banks. For now, the measures seem to be aimed primarily at the two rebel-held regions in eastern Ukraine, and it’s hard to imagine that Putin’s well-heeled comrades will be unduly inconvenienced by the sanctions.