President Biden banned American banks from buying Russian bonds

Starting June 14, US banks will generally be banned from buying bonds issued by the Central Bank, the Ministry of Finance or the Russian national investment funds.

US President Joe Biden. Photo: Shutterstock

According to CNN, this is a statement just released by the US Treasury Department, and is also an escalating sanctions move that the US targets Russia with accusations of Moscow meddling in the US presidential election in 2020 and attacking network to the US government and corporate computer systems.

Under the new sanctions, firms on Wall Street will not be able to continue buying or underwriting important bond transactions issued by the Russian central government.

This move will also make it more difficult for Moscow to raise capital. The ruble on April 15 fell nearly 1% against the US dollar, while the Russian stock market also slipped slightly after US sanctions.

In August 2019, the Trump administration issued a decree banning US banks from participating in bond transactions issued by the Russian government that are not in rubles, and banned providing loans to Russia. not in rubles. That means most transactions with Russia will have to be done in US dollars and Euros.

Under President Joe Biden, the US administration increased sanctions against Russia by banning US financial institutions from buying bonds issued in rubles. The US Treasury Department also said that US banks would be prohibited from lending sanctioned Russian entities to Russian entities on the list of sanctions.

According to Kevin Petrasic, Head of Banking Management at Davis Wright Tremaine Law Firm, foreign banks operating in the US may also be affected by US sanctions against Russia. Mr. Petrasic said that the US Treasury Department was very tough when making a ruling on transactions between foreign banks and sanctioned entities.

US Treasury Secretary Janet Yellen said: “The President (Joe Biden – BTV) has signed this new sanctions decree in response to the successive and escalating deliberate actions of Russia”.

As for Mr. Win Thin, Head of Global Monetary Strategy at Brown Brothers Harriman Investment Bank, the US sanctions will “make Russia difficult to attract foreign investment capital”.

However, Mr. Win Thin said that there is still a bright spot for the market because the Biden administration has not banned banks from buying Russian issued bonds but trading on the secondary market.