Government officials have examined what impact sanctions would have on each of the major banks, including Sberbank and VTB, Russia’s two largest banks. Sberbank has about a third of the assets in the country’s banking sector and VTB has more than 15 percent. Some experts are skeptical that the government would put those two banks on the SDN list for fear of the consequences for the Russian and global economies. For now, US officials are not ready to cut all Russian banks off of Swift, the major Belgian money transfer system used by more than 11,000 financial institutions worldwide.
The Treasury Department has other sanctions lists that incur costs and cause less widespread suffering. For example, it could put a bank on a list that prevents it from transacting with dollars. Many international trade transactions are made in US dollars, the currency of the global economy.
The Ministry of Finance is also expected to put more Russian officials, businessmen and companies on its sanctions lists.
On Thursday afternoon, the national stock market in Russia had fallen nearly 40 percent.
The Commerce Department has made plans to restrict exports of certain US technologies to Russia, a tactic the Trump administration used to hobble Huawei, the Chinese telecommunications company. The controls would harm the supply chain for some Russian sectors. US officials said their targets were the defense industry and the oil and gas industry.
European officials are expected to announce sanctions similar to many of those planned by the United States, as they did this week. However, they have been more cautious about imposing the toughest sanctions due to the continent’s robust trade with Russia.
While Biden has said he will consider sanctions, US officials are not planning any major disruptions to Russian energy exports, which are the mainstay of the country’s economy, for the time being. Europe relies on the products, and rising oil prices worldwide would lead to more inflation and more problems for politicians. However, Germany announced this week that it will not certify Nord Stream 2, a new natural gas pipeline connecting Russia and Western Europe. On Wednesday, Mr Biden announced sanctions against a subsidiary of Gazprom, the major Russian energy company, which constructed and planned to operate the pipeline.
Understand the Russian attack on Ukraine
What is the basis of this invasion? Russia sees Ukraine as its natural sphere of influence, and it has become nervous about Ukraine’s proximity to the West and the prospect of the country possibly joining NATO or the European Union. Although Ukraine is part of neither, it receives financial and military aid from the United States and Europe.
“We’ve been outspoken, we’re outspoken to the American people that our measures – the measures we have and are willing to impose on the Russian Federation – will certainly not come at no cost to the Russian Federation,” said Ned Price, the Russian Federation’s chief executive officer. A spokesman for the Ministry of Foreign Affairs said this on Wednesday. “But they won’t be completely free to the rest of the world either.”