Russia’s Finances Are Closing Up

A week ago Russia was a more or less well-integrated part of the global financial system. Shares of Russian companies traded in Europe and the U.S., Russian companies issued bonds to global investors and did joint ventures with global companies, Russian commodities were sold abroad for dollars and euros, Russian airlines leased planes from Irish finance companies, everything was just part of an international web of contracts and transactions.

It is possible that, say, a year from now none of that will be true. It is possible that Russia will continue invading and occupying Ukraine and killing civilians there, that international sanctions against Russia will continue and become harsher, and that even beyond legal sanctions international companies and investors will avoid dealing with Russia due to public pressure or worries about risk . And in a year shares of Russian companies will trade only in Russia, Russian companies will not get financing from abroad, there will be no joint ventures, they’ll own their own planes made in Russia, etc. (Or, more plausibly, Russia will maintain financial ties to some foreign countries, mainly China, but will be shut out of broader international markets.)