Frank Media found out that up to €7 billion hung on NSD's accounts due to sanctions

€4.5–7 billion remain blocked in NSD's foreign depositories, Frank Media sources estimated. Sanctionsagainst the national depository introduced on June 3;NRD then considered what was happening an emergency

On the accounts of the Russian National Settlement Depository (NSD) in foreign depositories, €4.5-7 billion of funds from banks and investors from Russia remain frozen after the introduction of international sanctions, the Frank Media portal writes, citing sources.

According to the online publication, since the end of February, the “depository bridge” between NSD and European depositories (Euroclear and Clearstream) has been blocked, which is why payments had to be made manually. By that time, the amount of hung funds amounted to about €15 billion, later more than half of this amount was transferred to its destination.

Restrictive measures against NSD are unlikely to have a significant impact on the state of medium and small banks in Russia, Yury Belikov, Managing Director for Validation at Expert RA, told the portal. He considered that over the past period, banks should have had time to withdraw funds in respect of which this could be done. Belikov stressed: “Under the current conditions, it is unlikely that any of the banks accepted a significant amount of credit risk on non-residents and maintained a large amount of funds in foreign currency on correspondent accounts to service any foreign economic activity.”

What sanctions against NSD mean for payments on public debt and foreign shares Finance

The National Depository keeps records of ownership of securities, as well as settlements on transactions. He deals not only with Russian papers, but also with foreign ones.

European countries imposed sanctions against NSD as part of the sixth package of measures about a week ago, on June 3. Brussels explained that the depository plays a "significant role in the functioning of the Russian financial system", as well as in its connection with the international financial system.

The Kremlin saw restrictive measures against the NSD as an attempt by the European Union to organize an "artificial default" in Russia. The depository assessed the situation after the imposition of EU sanctions as an emergency. NSD's regulatory documents state that in order to qualify a situation as an emergency, the occurrence of circumstances that prevent the depository from fulfilling its obligations to depositors is necessary. “We recommend that foreign currency be credited to NSD's correspondent accounts, taking into account the risk analysis of such crediting,” the depositary warned.

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