White House says Russia’s largest banks could be next sanction target

A senior administration official said Tuesday that Russia’s largest banks could be the next targets of sweeping sanctions if Moscow further invades Ukraine.

“No Russian financial institution is safe if the invasion proceeds,” the official told reporters. “This is only the sharp edge of the pain we can inflict.”

The official’s remarks followed President Biden’s announcement that he’s imposed major sanctions on Russia’s VEB and PSB banks.

The sanctions block American financial institutions from processing transactions for PSB, which funds Russia’s military, and VEB. That effectively cuts the banks out of transactions using U.S. dollars, the global reserve currency.

“The full block of these banks means they can no longer make any transactions with the U.S. or Europe,” the official said.

Mr. Biden also imposed sanctions on individuals within Russian President Vladimir Putin’s inner circle, saying that since they “share the corrupt gains” of the Kremlin’s policies, they “ought to share the pain as well.”

Aleksandr Bortnikov, the director of Russia’s Federal Security Service, the successor to the KGB, was among those sanctioned along with his son, Denis Bortnikov.

Others sanctioned include Petr Fradkov, chairman and CEO of PSB, and Sergei Kiriyenko, a Russian politician.

The official said targeting these four individuals put Russian elites and their family members “they are on notice” that action could be taken against them.

Other sanctions available to the U.S. could cut Russia off from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a high-security network that connects financial institutions around the globe.

If Russia is removed from SWIFT, it would severely hamper its ability to do business with other countries around the globe. Shipments of metals, oil, gas, and other commodities could stop for at least some time.

Blocking Russia from SWIFT could be one of the largest penalties aimed at Russia, should it further invade Ukraine.

“We are not taking SWIFT off the table,” the official said.