Euroclear equated EU plans for reinvestment of Russian assets to expropriation

The plans of the European Union (EU) to invest the money received from blocked Russian assets in risky investments to finance Ukraine would be tantamount to expropriation. This was announced on July 15 by Valerie Urbain, Director General of the Euroclear depository.

"The EU's plans to raise additional funds for Ukraine by investing frozen Russian public funds in riskier investments would be tantamount to 'expropriation,'" she said in an interview with the Financial Times (FT) newspaper.

According to her, the EU's plans to reinvest funds, which include frozen Russian assets, in order to achieve higher profits may lead to retaliatory actions from Moscow, as well as undermine the position of securities in the financial system.

According to the newspaper, the European Commission (EC) is considering extracting greater benefits from the €191 billion of assets of the Russian central bank that have been arrested and "stuck" in Euroclear. At the same time, Urbain noted that the profit from them decreases when the European Central Bank reduces the interest rate.

According to her, this prompted the commission to propose redistributing funds to more risky asset classes that can generate higher returns. Such an action can have certain consequences and lead to possible losses.

"The systemic risk will certainly increase dramatically if we have to go beyond our existing risk profile, which is allowed by our supervisory authorities," concluded Urbain.

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On July 13, US Senator Lindsey Graham (included in the Russian list of terrorists and extremists) said that the United States wants to use not only interest from frozen assets of Russia in order to help Ukraine. According to him, US Treasury Secretary Scott Besent intends to go even further in this matter.

Alexei Chepa, deputy chairman of the State Duma's International Affairs committee, said on July 14 that the confiscation of Russian assets, which Graham might hint at in his statements, would be a dangerous decision for the United States. According to the MP, the loss of confidence in the dollar will harm the financial system of the whole world.