Will Western Banks Walk Away From Russia?

Banking is an asymmetric business. You make modest amounts of money most of the time and then occasionally you suffer extraordinary losses. A small fraction of your assets going bad can trash a material percentage of your earnings.

This is the reality many banks face as they size up their exposure to Russia. European bank stocks, in particular, have suffered steep declines since the invasion in Ukraine began, and the cost of insuring their debt has risen.