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Ukraine slaps sanctions on banks, Russia to retaliate

Staff Writer |
Ukrainian President Pyotr Poroshenko introduced sanctions against five Russian banks and Moscow threatened to retaliate in a new spin of tensions between the states.

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Poroshenko has approved a decision of the National Security and Defense Council to impose sanctions against Russia’s Sberbank, VTB Ukraine, BM Bank, a unit of the Bank of Moscow, Prominvestbank, unit of Vnesheconombank, and VS Bank of Sberbank for a year.

Poroshenko is prohibiting them from disinvesting from the country for the period, as well as barring Ukraine’s state-owned companies from depositing funds with the banks, according to a decree, published on his official Web site.

President Vladimir Putin’s spokesperson Dmitry Peskov said that Moscow is ready to respond to the sanctions and is concerned with the situation.

“We are keeping an eye on the case and will protect legitimate interests of our financial organizations using all available legal means,” he told reporters. “This unambiguously contradicts international law.

“The situation in Ukraine looks frightening with its tendency of further degradation and higher tension.

“In economic terms, the country has been losing its status of a reliable and predictable place for investment and where you can be present as a subject of economic life for foreign, international investors.”

He added that Putin will be ready to discuss banking operations in Ukraine at his upcoming meeting with the Russian Union of Industrialists and Entrepreneurs.

Russia’s central bank said in a statement that even the most adverse scenario in Ukraine will be unable to impact the Russian banks’ financial security much.

“According to our estimates, even the most negative scenario will not have a substantial influence on the financial stability of the Russian banking groups considering the modest size of their investment in Ukraine and provisions for impairment of the assets,” the statement said.

Ukraine’s Foreign Ministry will also suggest that the E.U., the U.S. and other countries should impose similar sanctions against the banks, President Poroshenko’s decree read.

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