Sanctions Will Weigh Heavily

Sanctions Will Weigh Heavily

Russian aggression has called forth a powerful reaction from the United States and its allies. Many on both sides of the Atlantic and the Pacific have described that response as inadequate, but make no mistake, the sanctions put in place so far will have a powerful effect on Russia and on Russia's leadership, one that will become more intense the longer they last. In this, time is not on Russia's side. Today's phalanx of measures builds on a weaker set of sanctions put in place when Russia seized the Crimea in 2014. The more recent set are primarily financial but include direct economic measures as well Most prominent is a freeze the assets of Russia's largest commercial banks as well as the reserves of Russia's central bank. The commercial banks in question account for some 80% of Russian banking assets. The action against the central bank will deprive Russia of some $630 billion worth of central bank reserves held in dollars, yen, and otherwise outside the ruble. This huge reserve, ironically built up to make Russia "sanctions proof" after the 2014 measures were put in place, is no longer at Putin's disposal. Though Russia holds some 15% of its central