confiscation of Central Bank assets will be a bad signal for other regulators – Kommersant

The head of the Central Bank, Elvira Nabiullina, said that the confiscation of Bank of Russia reserves would be a bad signal for regulators in other countries. According to her, this will also lead to the undermining of the global financial system.

Ms. Nabiullina noted that international law presupposes the principle of protecting the reserves of Central banks. “This immunity ensures the stability of the international financial system. Deviation from this principle, in our opinion, will lead to undermining, albeit gradually, undermining the system of international finance and the position of reserve currencies in the world,” she said during a press conference.

The head of the Central Bank also noted that countries with which Russia maintains financial and trade relations “are showing much more interest in diversifying assets.” “It seems to me that this is an absolutely natural reaction to such risks of confiscation of reserves,” said Ms. Nabiullina.

After the outbreak of hostilities in Ukraine, the G7 countries, the European Union (EU) and Australia froze Russian assets with the aim of using them to help Kyiv. The international depository Euroclear holds the majority of Russia’s frozen assets – €200 billion out of €269 billion. Yesterday, February 15, Euroclear chief executive Liv Mostray said that using Russian assets to support Ukraine would “create risks” for the financial stability of Europe.

The United States is in favor of confiscating assets to finance Ukraine; Germany, France and Italy are against it. On February 1, an EU summit was held in Brussels, at which a mechanism was approved for transferring income from Russia’s frozen assets to help Ukraine. It is expected that the income will be stored in special accounts, and after the necessary taxes are written off, the money will go to the budget and go to help Ukraine.

Read more in the Kommersant article. “Frozen assets remain with their own”.