European Banks Have A Ton Of Exposure Ukraine And Russia

[FarCenter]

BIS data for September 2013 shows reporting European banks had claims in the amount of $156 billion in Russia, against less than $40 billion of the US (Figure 1). Within the EU, France is certainly the most exposed, at $51 billion (see Figure 3). Italy comes second with $28.6 billion, followed by Germany at $23.7 billion, the UK at $19 billion, the Netherlands at $17.6 billion and Sweden at about $14 billion.

...

Individual bank-level data on operations abroad are not always publicly available, but a recent report by the Economist Intelligence Unit compiled a list of the top 15 banks operating in Russia, finding that Raiffeisen Bank International (Austria) and UniCredit (Italy-Austria) are the European banks that could be more at risk in Ukraine.

Operations in the country are relatively small. Both banks have operations for an amount of 5-5.5bn of USD in assets at the beginning of 2014 and relatively to the size of group assets these figures are very small. According to EIU, the Ukrainian operations constitute about 3% of total assets of the Austrian parent company for Raiffeisen, and less than 0.5% of total assets for Unicredit). BNP Paribas is also present in Ukraine, with operations limited at 3bn USD.

The exposure of European banks to Russia is significantly more sizable. Table 1, taken from the same EIU analysis, shows that Italy, France and Austria have a non-negligible financial stake in Russia. The most exposed is Unicredit Bank, with 24bn USD (or 2% of the total group assets). Rosbank, the Russian subsidiary of French Société Génerale, follows suit with 22bn USD (or 1% of the total group assets). Austrian Raiffaisenbank has Russian operations for 20bn USD, which correspond to a worrying 12% of the total group assets.

Read more: http://www.bruegel.org/nc/blog/detail/article/1275-russian-roulette/

[awake]

1. The banks should call in there loans

[FarCenter]

2. The Russians would block their assets in Russia. Two can play the game.

[awake]

3. Do you think that European Banks have more assets in Russia than Russians have in European Banks?

[FarCenter]

6. Yes, I think that EU banks and investors have more money in Russia than do Russians in the EU

Furthermore, a lot of "Russian" assets outside Russia are owned by oligarchs that have been moving money abroad.

Putin would not mind seeing them lose a lot of money and power.

[ProSense]

4. Playing up Russia's hand? What happened to the claim that sanctions

were a weak joke?

Russians laughing at sanctions? Pure bluster
http://www.democraticunderground.com/10024685278

Investors are fleeing Russia and they are losing billions of dollars
http://www.democraticunderground.com/10024685574

France Threatens to Cancel Russian Ship Contract Over Crimea Annexation

—By Kevin Drum

So what can Europe do to express its displeasure over Russia's annexation of Crimea? Robert Farley writes that France is currently building a pair of amphibious helicopter carriers for Russia's Pacific fleet:

That sale is now in considerable doubt. Because of Russia’s invasion and presumed annexation of Crimea, the European Union is considering a variety of sanctions against Moscow. The biggest stick, in military terms, may be the Mistrals, a pair of 21,000 ton warships capable of carrying over a dozen helicopters, in addition to a well-deck for amphibious landing craft. That the Russians chose to name the second ship Sevastopol, after a city not in Russian possession until after the recent invasion, only makes the sale so much uglier from the European point of view.

....The purchase of the Mistrals (which was to include a pair of ships built under license in Russian yards) was controversial in Russia, given that it represented a transfer of scarce defense monies to a major foreign contractor. Some Russian analysts also expressed concern about what technologies the ships would include. However, given the inability of Russian yards to turn out large, quality ships since the end of the Cold War, the Mistrals represented the best chance of adding aviation and amphibious capabilities to Russia’s decaying fleets.

That final sentence is crucial. Russia didn't agree to buy French ships because it wanted to. It signed a deal to buy French ships because it had to. The Russian military may still be able to take on Crimea or South Ossetia—neither one larger than Vermont—but it no longer has the capability to do much more. For all his nationalistic bluster, Vladimir Putin has done nothing to address this shortfall, contenting himself instead with creating a comfortable, oligarchic state that can, for the time being, live off its mineral wealth. Putin may or many not decide to invade Eastern Ukraine, but if he does, he'll only do it if he believes that Ukraine will fall with barely a shot fired. He really can't afford to fight a serious war.

In any case, the French foreign minister said today for the first time that the Mistral deal might well be canceled—but only if other countries pitch in. "We will ask others, and I'm thinking namely the British, to do the same with the assets of the Russian oligarchs in London," he said in a TV interview. "Sanctions have to be shouldered by everyone."

http://www.motherjones.com/kevin-drum/2014/03/france-threatens-cancel-russian-ship-contract-over-crimea-annexation

[TheKentuckian]

5. Tell McShame about that, that is about all we can reasonably do and to be effective

it is the Europeans that will have to do the heavy lifting and sacrificing to have any real impact, our options are quite limited and situationally I'd say taking the lead even with what sanctions we can impose is fairly aggressive.