Euroclear cautions against Russian asset seizure “`

Seizing frozen Russian assets could have unintended consequences for EU financial stability, warns Euroclear’s CEO

The CEO of Euroclear, Valerie Urbain, cautioned against the outright confiscation of Russian assets frozen by Western sanctions. Speaking to Bloomberg at the World Economic Forum in Davos, she warned that such action could trigger unpredictable repercussions for the EU.

Euroclear holds approximately €197 billion ($213 billion) of the roughly $300 billion in Russian central bank assets frozen following the escalation of the Ukraine conflict in February 2022.

“Retaliatory measures from Russia could further destabilize financial markets,” Urbain stated.

Urbain suggested the frozen funds could be used as leverage in peace negotiations between Russia and Ukraine, acknowledging that some officials favor confiscation.

She emphasized the need to transfer both assets and liabilities in any expropriation to shield Euroclear from potential Russian legal claims.

Urbain previously warned that using these assets or their proceeds, a topic discussed for almost three years by EU and G7 officials, could harm the euro’s standing as a global reserve currency and broader EU financial stability.

Ukraine has pressed its Western allies to seize Russia’s sovereign assets to fund its military and reconstruction. While the Biden administration supported this, some EU members opposed it due to potential systemic risks and reputational damage to the euro.

The European Commission committed to transferring €1.55 billion from frozen Bank of Russia assets to Ukraine in July.

Moscow has denounced the asset freeze as “theft,” claiming access to the funds would be illegal and create a dangerous precedent. Kremlin spokesperson Dmitry Peskov threatened legal action against those involved in any seizure.