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Financial screws turned on Russia as insurers exit, London stocks halted -Breaking


© Reuters. FILEPHOTO: London Stock Exchange Group offices can be seen in London City, Britain on December 29, 2017. REUTERS/Toby Melville

Carolyn Cohn, Lawrence White

LONDON, (Reuters) – Russia’s financial isolation increased Friday when the London Stock Exchange (LSE), suspended Russian securities trading and certain insurers pulled cover for exporters in response to Moscow’s invasion.

Recent days have seen banks, insurers and investors increase the pressure on Russia by exiting their investments and stopping the provision of services.

After a Thursday-long freeze in trading, the LSE announced that it had stopped global depositary receipts, which are shares in foreign companies.

Trading halts are being imposed by the United States and Britain as they continue financial sanctions against Russia. These sanctions prevent Russian companies from accessing Western countries.

According to industry sources, another twist has been made on Moscow by trade credit insurers. These insurance companies provide financial protection for both exports and imports. However, there are risks associated with sanctions, high claims, missed payments and other unpaid liabilities.

Russia’s already fragile economy will be further strained by the move to join the almost $3 trillion global marketplace.

Nick Robson of Marsh, a global leader in credit specialties, said that trade credit insurance companies will have stopped supporting Ukraine or Russia’s new risks over the last week.

Six officials from the European Union told Reuters that they are looking into how to reduce Russia’s influence at the International Monetary Fund and its access to financing following the invasion. [L2N2V71XO]


After a series of announcements similar to those made in the past few days, Royal London, a British asset manager and insurer, announced that it would sell Russian assets immediately.

Royal London Chief Executive Barry O’Dwyer stated to Reuters that “we can’t trade those things anyway” but that the company will divest as soon as possible.

Another major British investment company’s CEO. Schroders (LON.) On Thursday, the Russian Stocks and Bonds were declared “intolerably uninvestable”

However, investors continue to pile into Russian-linked funds as they consider current levels of distress to be a cheap way to access Russian assets.

Deutsche Bank (DE:) stated that it is stress-testing Russia’s operations, which employs around 1,500 people in a large technology centre. This comes as Russian banks are struggling to cope with increasing financial isolation.

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