British banks have spoken out against the use of Russian assets.

Senior UK bankers have criticized the proposal to use frozen Russian assets because the British authorities have not offered them compensation in the event of retaliatory measures from Russia, according to the Financial Times (FT), which spoke to creditors on condition of anonymity.

Bankers are concerned about the serious legal risks that could arise if assets are used to provide loans to Ukraine. Another problem, according to FT sources, is the lack of guarantees that a peace agreement between Ukraine and Russia will include reparations that could pay off the debt .

"The government is setting a new precedent, as it has never confiscated assets in this manner before. Russia will take the matter to court," one of the FT's sources said.

Another of the newspaper's banking consultants warned: "The legal risk is that if Ukraine doesn't return the money , you will have to confiscate property that the government says belongs to you, but that Russia says doesn't belong to you."

Information about which UK banks hold Russian sovereign assets is kept "top secret," the FT notes. British officials declined to comment to the newspaper on whether the government would provide guarantees to creditors if Russian assets were used as collateral for loans, rather than being confiscated outright.

The UK and EU countries accelerated discussions on the use of Russian assets in early autumn. British authorities make decisions independently of the EU but coordinate their actions with EU countries, the FT reports. Since the start of the military operation in Ukraine, Russian assets worth approximately €260 billion have been frozen in Western countries. Most of these assets are held in the Belgian depository Euroclear. Belgium, Euroclear, and the European Central Bank have opposed the confiscation of the assets.

Moscow has repeatedly warned that it will consider any actions with its foreign assets "robbery" and will respond to them, defending its interests in the courts. The State Duma emphasized that using Russian assets for a "reparations loan" would constitute theft and illegal deprivation of property.

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