Russian banks, and through them Russian companies in general, traditionally relied on Western capital markets for financing, having accumulated a total US$659 billion in foreign debt by June 2014 (Figure 4). EU and US sanctions heavily restricted this practice, with a ban on Western loans to five state-owned banks representing over half of total assets held by the Russian banking sector. Unable to get foreign loans extended, banks and their corporate clients were forced to pay back US$150 billion during the 12 months following June 2014, at a time when they could least afford to do so (Figure 4). Combined with the economic downturn, the devaluation of the rouble, and a financial situation that had been precarious even before 2014, sanctions pushed Russia’s banking sector to the brink of collapse. In January 2015, the government was forced to intervene, digging deep into its international reserves with a 1 trillion rouble (€12 billion) bail out.
Russia, external corporate debt
We write about
Disclaimer and Copyright statement
The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.
For a comprehensive description of our cookie and data protection policies, please visit Terms and Conditions page.
Copyright © European Union, 2014-2021. All rights reserved.