Euroclear director saw risks for stability in Europe in the confiscation of Russian assets

Executive Director of the international depository Euroclear Liv Mostray in an interview with the newspaper Financial Times (FT) said using Russia’s frozen assets to support Ukraine would “create risks” for Europe’s financial stability. Ms. Mostrey called the G7 plan to use Russian assets “pretty close to indirect arrest.”

“Using assets that don’t belong to you as collateral is very close to an indirect seizure or a commitment to future seizure, which could have exactly the same consequences for markets as a direct seizure,” Liv Mostrey said, noting that such a decision could also expose Euroclear to legal action.

Euroclear holds the majority of Russia’s frozen assets – €200 billion out of €269 billion. The United States is in favor of confiscating assets to finance Ukraine, while Germany, France and Italy are against it. The latter, as the FT notes, adhere to the view that sovereign assets have immunity under international law.

After the outbreak of hostilities in Ukraine, the G7 countries, the European Union (EU) and Australia froze Russian assets. On January 16, the Belgian Ministry of Finance announced that the European Union had begun work at a technical level to seize the frozen assets of the Bank of Russia. On February 1, an EU summit was held in Brussels, at which a mechanism was approved for transferring income from Russia’s frozen assets to help Ukraine. It is assumed that the income will be stored in special accounts, and after the necessary taxes are written off, the money will go to the budget and go to help Ukraine.

Read more in the Kommersant article. “Frozen assets remain with their own”.