(Bloomberg) -- The U.S. government is considering whether to shut one or more Russian banks out of the world financial system if rebels backed by Russia continue to violate the cease-fire in Ukraine, two administration officials said.
Putting a Russian bank on the U.S. Treasury’s “specially designated national” list would be a major escalation of the economic pressure the U.S. is exerting on Russia to stop supporting the separatist rebels who’ve seized parts of eastern Ukraine. The action would bar U.S. citizens, residents and companies from dealing with the sanctioned banks and allow the U.S government to freeze any assets in American jurisdiction.
The impact, however, would be global. Foreign banks with significant business in U.S. dollars would be reluctant to risk running afoul of the restrictions, just as they were after the U.S. fined France’s BNP Paribas SA nearly $9 billion last year for violating sanctions against Iran, Cuba and Sudan.
“An SDN listing for any Russian bank that does serious business with the West -- and has correspondent and other banking and financial relationships -- would be a devastating blow,” said Juan Zarate, a former Treasury Department and White House official, who is now chairman of the consulting company Financial Integrity Network.
Both officials who discussed the sanctions deliberations said that blocking additional Russian banks would be a significant escalation and could create large repercussions, particularly in European economies. Such a move isn’t imminent, they cautioned, unless the Russian-backed rebels renew their offensive before a March 19 European Union summit.
The Obama administration blocked OAO Bank Rossiya in March 2014, calling it the “personal bank” of Putin’s inner circle.

U.S. Secretary of State John Kerry and European Union President Donald Tusk, a former Polish prime minister, warned this week that new sanctions could be imposed.
The most extreme measure under consideration by President Barack Obama’s administration is shutting banks out of the Western financial system entirely, said two other U.S. officials, who requested anonymity because the policy discussion aren’t public.
“This would add a powerful economic hit longer-term,” said Robert Kahn, a former Treasury official who’s now a senior fellow for international economics at the Council on Foreign Relations in Washington.

Acting in concert last July, the U.S. and EU, started imposing restrictions on access to capital markets for several Russian banks. Those sanctions, which were tightened in September, prohibit long-term debt or equity financing by Russian banks, including the country’s biggest lenders, VTB Group, OAO Sberbank and OAO Gazprombank.
European leaders are discussing ways to put more pressure on Russia’s economy and its financial system. U.K. Prime Minister David Cameron said on Feb. 24 that the EU should consider sanctioning entire sectors of the Russian economy if the current truce in Ukraine fails. He also raised the possibility of barring Russian banks from the international financial messaging system used for most international money transfers. That system is run by the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT.
“Looking at the SWIFT banking issues is a big decision, but there is a logic for it,” Cameron said. “If Russia is going to leave the rules-based system of the 21st century, it will have to start thinking about whether it is going to be in the 21st-century system when it comes to investment, banking, clearing houses and the other things that make our world work.”
The U.K. first urged EU leaders to consider blocking Russian access to SWIFT in August, but the idea wasn’t pursued. The U.S. also has considered the idea, though the Obama administration leans more toward fully sanctioning individual banks if a decision is made to escalate the pressure on Russia, one of the American officials said.
Some U.S. lawmakers have been pressuring the administration to intervene more forcefully. At a Bloomberg breakfast in Washington Thursday, U.S. Senate Foreign Relations Committee Chairman Bob Corker said he’d support additional sanctions against Russia if there were any violation of the February truce agreement. He lamented that the U.S. hasn’t done more to provide Ukraine with defensive weaponry to withstand Russia’s advances.
“A long time ago, we should’ve been giving them lethal weaponry that they can handle,” said Corker, a Tennessee Republican. “I think we have not shown much moral fiber as it relates to Ukraine.

MOSCOW (Reuters) - Boris Nemtsov, a Russian opposition politician and former deputy prime minister who was an outspoken critic of President Vladimir Putin, was shot dead meters from the Kremlin in central Moscow late on Friday.

Nemtsov, 55, was shot four times in the back, the Interior Ministry said. A police spokeswoman on the scene said he had been walking on a bridge over the Moskva River with a Ukrainian woman.

Putin condemned the killing and took the investigation under presidential command, saying it could have been a contract killing and a "provocation" on the eve of a big opposition protest that Nemtsov had been due to lead in Moscow on Sunday.

Police cars sealed off the bridge close to the red walls of the Kremlin and Red Square, and an ambulance was on the scene.

"Nemtsov B.E. died at 2340 hours as a result of four shots in the back," an Interior Ministry spokeswoman said by telephone.

A police spokesman on the scene said Nemtsov had been shot at from a passing white car that fled the scene. The woman was being interviewed by police.

Mikhail Kasyanov, a fellow opposition leader, told reporters at the bridge: "That a leader of the opposition could be shot beside the walls of the Kremlin is beyond imagination. There can be only one version: that he was shot for telling the truth."

Kasyanov, a former prime minister under Putin, called Nemtsov a "fighter for the truth".

OPPOSITION TO WAR IN UKRAINE

Nemtsov had been quoted as saying he was concerned that the president might want him dead over his opposition to the conflict in Ukraine. Sunday's opposition march is intended as a protest against the war in east Ukraine, where pro-Russian rebels have seized a swathe of territory.

Putin's spokesman, Dmitry Peskov, told Russian news agencies that the president had expressed his condolences and ordered the security agencies to investigate. He said Putin had called it a "brutal murder".

Another opposition figure, Ksenia Sobchak, said Nemtsov had been preparing a report on the presence of Russian troops in Ukraine. The Kremlin strongly denies allegations by Kiev and Western capitals that it has sent troops and advanced weaponry to back the rebels.

Peskov said Putin had called it a "brutal murder".

Like other opposition leaders, Nemtsov was a fighter against corruption. In other reports, he condemned massive overspending on the Sochi Winter Olympics by the Russian authorities and listed the many state buildings, helicopters and planes that Putin has at his disposal.

Nemtsov was also one of the leaders of mass rallies in the winter of 2011-12 that became the biggest protests against Putin since the former KGB spy rose to power in 2000.

Nemtsov briefly served as a deputy prime minister under president Boris Yeltsin in the late 1990s, when he gained a reputation as a leading liberal reformer.

So have your predictions of Russia defaulting come true yet adrtho? It's only been about 8 months.

So have your predictions of Russia defaulting come true yet adrtho? It's only been about 8 months.

50% of Australian expat who work in Russia have left in last 8 months

Source for this?

In January 2014, the community of foreigners from North America and Western Europe numbered 1,137,000. A year later, it had dwindled to 746,580.

oil price dropping, Norway about to take a big hit