European Union subsidiaries of Russia’s state-owned banks can continue borrowing and lending in the bloc’s 28 member states as long as they don’t raise money on European capital markets to transfer back to their parent banks, EU officials said.
Major state-owned Russian banks will be barred from selling shares or bonds to European investors, the EU said yesterday. The sanctions include an “anti-circumvention clause” that prevents them from issuing securities in Europe via subsidiaries, the officials said today.
EU units of Russia’s state banks haven’t sold bonds or shares in the past four years and, if they tried to, regulators would assess whether the proceeds would be sent to the parent company, the officials told reporters in Brussels on condition of anonymity.
Russia-based parent banks will be allowed to raise money in Europe via direct or syndicated loans, the officials said, and EU regulators will monitor transfers or loans between the parents and EU-based subsidiaries. The EU will publish the legal texts of the new regulations tomorrow.
The European Central Bank will also play a part in monitoring the banks in line with the sanctions when it starts direct supervision of some of the Russian subsidiaries in November, an ECB official who asked not to be identified said.