Emerging Europe

The early days of war in Ukraine saw the price of bitcoin rise. New technology now improves the prospect that wealth stored in crypto may be spent.

As the US takes action to tighten sanctions on Russia by banning energy imports, Europe is trying to pull together a plan to wean itself off Russian gas through greater use of LNG and renewables.

It has been a tough few years for Europe’s banks, but they finally seemed to be firmly on the road to recovery in early 2022. Then Russia invaded Ukraine. Will the financial turmoil that follows derail the sector’s hard-fought-for revival?

The prospect of China’s Cross-Border Interbank Payment System vying with or supplanting Swift grabbed attention in the wake of Russia’s invasion of Ukraine. But CIPS isn’t ready for the big time. It is too small and underdeveloped, and is a policy vehicle dominated by Beijing for the purpose of globalizing the yuan.

Western governments hope Russian citizens will blame the regime of president Vladimir Putin and seek change. That is a gamble.

In just a few years, the New Eurasian Land Bridge, which conveys rail freight between China and Europe, became a key part of Beijing’s fading Belt and Road Initiative. Thanks to sanctions levied against state operator Russian Railways, that vital trade link threatens to be disrupted – and possibly severed.

With little chance of a swift resolution to the conflict in Ukraine, the effect on FX markets is being felt well beyond the bounds of the former Soviet Union. But not all reactions have been typical for a crisis.

Oligarchs that use shell companies and fake identities may dodge the pain of Russian banks being shut out from Swift, heaping it on innocent people instead.

Several sovereign funds have either pledged to leave Russia or are considering doing so. But how will they get out? Could their exit enrich those that sanctions are intended to penalize?

ING and Intesa Sanpaolo could take bigger hits than Societe Generale in a ‘walk-away’ scenario, according to Autonomous Research.

Jane Fraser can front Citi’s investor day with good news about consumer divestments in Asia. It is hard to see a Russia sale now, though.

Exclusive: The head of Ukraine’s largest bank tells Euromoney that it is refilling ATMs and keeping branches open even as Russian attacks intensify.

The US has named Russia’s sovereign wealth fund and its chief executive in strikingly harsh language as part of its sanctions package. Is RDIF ‘a slush fund for president Vladimir Putin’ or a legitimate vehicle ‘building international relations and supporting constructive ties’?

Decades of work have been put into building Russia’s financial system. Putin’s war is destroying it overnight.

Russians could try to use cryptocurrencies to dodge sanctions following the invasion of Ukraine, but a move into the mainstream by crypto exchange heads hungry for fiat currency wealth will complicate evasion tactics.

In the raging crisis between Russia and Ukraine, fixed income bankers picking over a disrupted new issuance market are finding echoes of the start of the coronavirus pandemic. But they warn that the conflict is only worsening inflation concerns – and that central banks are in a bigger bind than ever.

For Putin, the threat of expulsion from Swift carries far less weight than it did in 2014. Russia’s own system for transfer of financial messages can now settle domestic transactions, but the move would still trigger a deep recession in the country.

Russia’s incursion dispels vain hopes of manageable tail risk and heralds a bear market correction.

Energy price volatility driven by war in Ukraine could deliver a windfall to banks such as Goldman Sachs that retain scale in commodity trading. Profits from dealing can also be made without triggering ESG or sanctions-related pain.

A year ago, Sber’s stellar profitability looked to be under threat. This year, it has defied the doubters and has just unveiled record net profit for the first nine months of the year.

At the end of each year, Euromoney takes a close look at the performance of 25 key institutions that we cover. Speaking to senior executives at these firms, we assess what went right and what didn’t, together with what might lie ahead. This year, we have also examined the views of those at the top on two important factors for 2022: their own and others’ asset quality, and the disruptive threat of China. Their observations are discussed in the two features below, followed by our reports for 2021 on the Euromoney 25.

Turkey’s currency continues to flounder, with hardline president Erdoğan apparently determined to prove that the best way to curb inflation is to reduce – rather than increase – interest rates.

Emerging Europe has been slow to join the fight against climate change. Now the region’s biggest banking group is making its voice heard.

Perhaps it is not such a strange time to bet billions on Turkey’s economy.

Policymakers in Moscow are finally promising to tackle climate change. Will the Russian private sector follow suit?

Can multilateral development banks fight climate change while still promoting economic development in emerging markets? The European Bank for Reconstruction and Development is the first to set out concrete plans on how to do this.

After reaching 10 million users this month, the firm is raising funds and seeking licences in Turkey and the EU.

A new anti-money laundering centre housed in the Baltic state’s central bank is growing and hiring fast. It aims to turn Lithuania into an AML hub – and to address and reverse the region’s questionable reputation.

ESG issues are part of the package with emerging market sovereign bonds.

Naysayers were swift to condemn Lithuanian involvement in the German scandal.