Euroclear opposes G7 plan to use frozen russian assets as collateral

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16 Feb 2024

The main holder of the frozen russian assets, the Belgian investment fund Euroclear, opposed the G7 plan to use these funds as collateral.


CEO Liv Mostry said in an interview with the Financial Times that the plan would pose risks to Europe's financial stability.


Euroclear holds about €191 billion in assets belonging to the russian central bank, the majority of the €260 billion in assets frozen abroad after russia's full-scale invasion of Ukraine.


The G7 plan involves using the assets as collateral to borrow money and transfer it to Ukraine. they want to force russia to repay it, and if it refuses, confiscate the assets.


In an interview, Mostry said that the plan would be "pretty close to an indirect seizure" of assets and would expose the company to lawsuits.


"Using assets that you don't own as collateral is very close to an indirect seizure or a commitment to a future seizure, which could have the same effects on the markets as a direct seizure," Mostry said.


This could expose Euroclear to lawsuits over its assets. "We don't see how the central russian bank can simply accept that its funds have been seized and that Euroclear's obligations to it have ceased to exist," she added.


Mostry hopes that "reason and rationality will prevail" and that confidence in Euroclear and European capital markets will not suffer.


The head of Euroclear responded better to the proposal to use the proceeds from the frozen russian assets. Last year, the company earned 4.4 billion euros, and in 2024 the amount may be no less.


Source: Financial Times