By Carolyn Cohn, Iain Withers and Sinéad Carew

LONDON/NEW YORK – Global financial stock fell on Monday as investors fear that the oil price will soar following Russia’s invasion of Ukraine.

Russian-linked lenders, investors, and payment companies have severed ties with the country. This is in the midst of Western sanctions against Russia. Although sanctions imposed by the United States were intended to restrict the flow and destroy Russia’s economic growth, Ukraine demanded that Russian energy exports be boycotted.

EY and Deloitte announced Monday that they will cut all ties with Russia. This follows similar moves made by KPMG, PwC and other Big Four consulting and accounting firms. This group audits blue-chip business accounts, and is crucial for businesses to secure international investors backing.

European asset managers Carmignac International, and Fidelity International declared that they will not purchase Russian securities.

banks fell 4.8% on Monday and the broader S&P 500 financial sector closed down 3.7% as the yield curve – the difference between longer- and shorter-dated U.S. Treasuries – narrowed, suggesting pressure on U.S. banks’ profitability. Since the February 24th conflict, more than 10% has been lost in the bank index. [US/]

Bank investors may also be faced with the decision whether or not to maintain business relations with Russia. According to experts and banking sources, closing a shop can be a difficult and expensive process.

U.S. Payment companies shares plunged Monday American Express Co (NYSE.) closed down 8.0% following its Sunday announcement that it would suspend all Russian and Belarus operations. Visa Inc (NYSE 🙂 fell 4.8% while Mastercard Inc (NYSE 🙂 fell 5.4%. PayPal Holdings Inc (NASDAQ): This fell 6.3%

Investor worries about the global economy were exacerbated this weekend by rising gasoline prices. Europe and the United States announced that they would consider banning Russian oil imports. This could increase energy prices, inflation, and prevent any recovery.

“You’re starting to hear more of the drumbeat from investors about the possibility of a recession due to inflationary conditions,” said R.J. Grant, head of trading at Keefe, Bruyette & Woods in New York.

“The Russian-Ukraine Conflict is a matter of urgency for the market. There’s too much uncertainty about the macro picture to allow people to feel comfortable spending money.

Fears about consumer spending led to shares being wiped out of other financial firms on Monday. Capital One Financial (NYSE: ) ended the day down nearly 7%, and Discover Financial finished the week down 8%. A transcript of the event shows that Discover indicated at a conference last Wednesday that the conflict should not have any effect on its fundamentals.

Dominick Gabriele of Oppenheimer stated that payment names have begun to rise in response to a slowdown on consumer spending. He also cited concerns over the impact inflation has had on real incomes.

A war in Afghanistan has raised doubts about whether travel across borders will return to its pre-war levels. If so, it would result in lower revenue than anticipated for the payment network.

Gabriele stated that “Travel to Europe is the most important cross-border transaction for Visa or Mastercard.”

JPMorgan’s strategists (NYSE:) advised clients that they should buy some beaten down Russian assets for a profit. They urged them to use the bond of Russian companies with significant international operations and aren’t on the sanction list to get the most out of distressed pricing.

Russian bond prices fell to new lows after Moscow invaded Ukraine. This is because investors are worried about the ability of Russian debtors to pay due to Western sanctions.

Russia considers its actions against Ukraine “a special operation.”

Russian banks that were targeted by the sanctions are trying to adjust. VTB’s digital consumer bank in Europe, VTB Digital Bank has closed its phones due to the high volume of calls it receives. This was according to an announcement posted by VTB on Monday.

Reuters reports that VTB’s European division is being closed by regulators.

France’s Credit Agricole, (OTC) stated that its exposure to Russia was approximately 6.4 billion Euros ($6.95 Billion). However, this will not affect its distribution of the 2021 dividend.

UBS, a Swiss bank giant, stated in its annual report that its exposure to Russia was $634 million at the end 2021. Although the exposure was reduced, it said that sanctions could affect its future.

After falling by 9.6% to a low of 13.3 months earlier Monday, the euro zone bank share index closed lower at 4.1% Monday. However, it had parsed losses.

While shares in Russian lenders suffered, Austria’s Raiffeisen (Italy’s UniCredit) and France’s Societe Generale(OTC:), fell in the double-digit range on Monday. However, they gained ground later.

($1 = 0.9204 euro)