Goldman, JPMorgan among banks left holding Russian stocks by sanctions switch

Goldman, JPMorgan among banks left holding Russian stocks by sanctions switch

When conditions permit, the banks could cash out those positions for what some of the sources said may result in sizeable profits.

Reuters could not ascertain the size of the positions because of the opaque nature of derivative trading books, and the sources said that profits were not a given for the banks.

Overall, billions of dollars tracked MSCI and FTSE Russell indexes that included Russian stocks before Moscow's invasion of Ukraine, which the Kremlin calls a "special military operation".

The fate of these assets, which has not been previously reported, shows how Western sanctions have had far-reaching and sometimes unintended impacts on the global financial system.

JPMorgan, Goldman, BNP Paribas and HSBC declined to comment. The London Stock Exchange , the parent of index provider FTSE Russell, declined to comment. MSCI did not respond to a request for comment.

'DELTA ONE' DESKS

At the centre of the unusual situation that the banks and their investors now find themselves in are positions taken by low-profile teams called 'Delta One' trading desks.

Traders in these divisions sell derivatives such as index swaps to sophisticated investors including hedge funds. Investors then get a return from an index, without them having to buy the stocks that make up that benchmark.

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