The US National Security Council and other senior officials from the Biden government have met with high-ranking executives from America's largest banks – including JP Morgan, Goldman Sachs, Citigroup, and Bank of America – regarding what actions to take should the US choose to level sanctions against Russia, according to sources cited in a Bloomberg report on Friday.
The US and EU are considering a number of plans, including potentially targeting Russia’s ability to convert currency or sell its oil and gas to Europe, or even blocking Moscow’s access to the SWIFT payment system. These are all possibilities that, while hurting Moscow, risk raining down collateral damage on the US as well.
The banking system is thus wary of such moves, Bloomberg reported.
“We have been very clear that if Russia further invades Ukraine, the United States is looking at a range of options – with allies and partners – to deliver severe costs to the Russian economy,” a US Treasury spokesperson said in a written statement on Friday.
No invasion has occurred, despite a flurry of related predictions from both Washington and Kiev – over the past two and a half months – but threats to delist Moscow from SWIFT have persisted regardless.
However, a report from the German media earlier this month indicated western leaders had abandoned the threat to cut Russia off from the service, even as the US National Security Council insisted “no option is off the table.”
The German report instead suggested that Berlin and Washington were considering “targeted” sanctions against Russia’s largest banks as revenge for the long-awaited Russian invasion of Ukraine – a move Moscow insists is not happening, but which the US claims is certain.
Should Russia be cut off from SWIFT, it would be forced to cease exporting much-needed oil, gas, metals, and other goods to Europe, the vice speaker of Russia’s upper house of Parliament warned on Tuesday.
This possibility has Germany feeling distinctly uneasy, and the European Central Bank has asked its clients to consider how they might respond to sanctions against Russia.
Citigroup, the US bank with the most exposure to Russia, has taken steps to reduce that exposure, announcing it plans to wind down its retail banking operations in the country and focus solely on institutional clients. It is also the only US bank with operations in Ukraine.