The flow of money from West to East is being reversed. Western investors have pulled billions of dollars out of Russia since August to cover their global credit hits. Russian bankers have met in Moscow to discuss the Russian reaction to a U.S. recession,

Oleg Vyugin, Chairman of MDM bank and a former Deputy Finance Minister, said Russian businesses should prepare for the worst.

“If the U.S. enters recession, Russia will suffer a slowdown. The first wave of the credit crunch forced the likes of Maxi Group to sell out to bigger rival NLMK. Everyone’s just thinking ‘we’ll be all right’, but a second wave will hit bigger companies, and the Russian Central Bank needs to prepare for that,” he said.

The First Deputy Chairman of the Central Bank, Aleksey Ulyukaev, said it was ready to act.

“The Central Bank’s powers are there to act as creditor of last resort if a Russian borrower can’t find finance on Western markets. We’ve already substantially increased liquidity in August, September and October, when Russian capital flight totalled $US 11 billion and many Russian borrowers were unable to refinance their debts,” he said.

Some domestic analysts maintain Russia will not suffer significantly. Scares in the banking system are pushing investors to the haven of commodities. With the likes of gold topping $US 800 per ounce on Wednesday and record prices for platinum, Russia’s many natural resources exporters are healthier than ever.

But banking leaders warn that Russia’s economy is now too inter-connected with the rest of the world to ignore global market turmoil.