The seizure of Russia’s frozen assets could lead to unforeseen consequences on the financial markets, claimed Valerie Urbain, CEO of Euroclear, in an interview with Bloomberg.
She pointed out that Russia could take retaliatory measures at any time, “that could further destabilize the financial markets.”On the other hand, the frozen assets could become an element in the negotiations, she added.
In the event of a seizure, individual countries should assume the responsibility to protect Euroclear from future Russian claims, Urbain said. As risks, the Euroclear CEO previously mentioned problems for the euro’s role as a reserve currency and the overall stability of the European financial system.
In December, the EU’s economic commissioner, Valdis Dombrovskis, said that the seizure of Russia’s assets was possible. He emphasized that the EU should discuss and work out all options.
Following the outbreak of the conflict between Russia and Ukraine, Western countries have frozen Russia’s central bank assets in the form of cash and securities worth around €260 billion, with more than two-thirds of that held by the Belgian Euroclear. The Russian finance ministry estimates the volume of frozen assets at around €300 billion in 2022.
Euroclear earned €4.4 billion in 2023 from Russian assets, which is about 80% of all interest income in that period. In the first nine months of this year, the custodian earned an additional €5.15 billion from Russian assets.
By the end of September, Euroclear was holding frozen Russian deposits worth €176 billion.
Last summer, the G7 countries decided to grant Ukraine a loan of €50 billion, which will be repaid from the earnings of the frozen Russian assets.
If EU countries decide to seize Russia’s assets, it will be considered theft and will not go unpunished, declared Russian President Vladimir Putin.