Russia faces new sanctions as investors rush for exit

  • Draft sanctions to be discussed at EU meeting – source
  • Russian investment “unthinkable” – CEO of M&G
  • The British Ministry of Finance met with asset managers on Russia
  • Manageable sanctions for the financial sector – BoE
  • European banking stocks up 6.3% after steep losses

BRUSSELS/LONDON, March 8 (Reuters) – Russia faces new economic sanctions as European officials prepare to meet on Tuesday to discuss new restrictions and more investors pull out of the country.

The European Commission has prepared a new sanctions package against Russia and Belarus aimed at hitting other Russian oligarchs and politicians and three Belarusian banks, three sources told Reuters on Tuesday. Read more

The draft sanctions were adopted by the EU executive on Tuesday morning and will be discussed by EU ambassadors at a meeting later today, one of the sources said on condition of anonymity.

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The package, provided it is approved by ambassadors, will exclude three Belarusian banks from the SWIFT banking system and add several Russian oligarchs and lawmakers to the EU blacklist, the sources told Reuters.

They said the package also proposes bans on the export of naval equipment and software from the EU to Russia and advises on monitoring cryptocurrencies to prevent their use to circumvent EU sanctions. .

At the same time, lenders and investors continued to cut ties with Russia, with British asset manager and insurer M&G (MNG.L) the latest to describe the country as uninvestable.

The company’s Russian assets have been reduced to almost zero, and CEO John Foley has said he has no plans to buy more.

“Russia is an impossible market to invest in from a ratings perspective. Further investment is clearly unthinkable,” he said.

Britain’s finance ministry has met with asset managers to explore how the industry could shed its stakes in Russian companies facing sanctions, the Investment Association said on Tuesday. Read more

Bank of England Deputy Governor Sam Woods said he believed Britain’s insurers and the broader financial sector would be able to absorb the impact of the sanctions.

Britain has banned Russian companies from the multi-billion dollar aviation and space insurance market, and some Russian banks are being sanctioned and disconnected from SWIFT.

“We have considered very carefully whether we believe these are manageable in terms of collateral damage or impact on the UK financial services sector, and so far we are confident that they are,” said Woods to an upper house committee. Read more

Ukrainian civilians began to leave two besieged areas on Tuesday after Russia opened “humanitarian corridors” for them, but Kiev said Russian forces shelled an escape route from the port city of Mariupol. Read more

Russia invaded Ukraine on February 24, describing its actions as a “special military operation”.

Since then, at least five commercial vessels have been hit by projectiles and the London marine insurance market has widened the area of ​​waters around the Black Sea and the Sea of ​​Azov which it considers to be high risk. Read more

The eurozone banking stock index (.SX7E) gained 6.3% as it recovered from a 13-month low on Monday.

Bank shares had fallen sharply as investors braced for the economic cost of the conflict, with lenders with operations in Russia – including Austria’s Raiffeisen (RBIV.VI), Italy’s UniCredit (CRDI.MI) and France’s Societe Generale (SOGN.PA) – the hardest hit.

They staged a double-digit rebound on Tuesday. Raiffeisen gained 13% and Unicredit and Societe Generale 10%, recovering some of their earlier falls.

($1 = 0.9204 euros)

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Written by Carolyn Cohn; edited by John O’Donnell and Barbara Lewis

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