Thread by @mafevema

I wanted to understand the tweet quoted below. So I did some research. What better source than the Central Bank of Russia.🧵
cbr.ru/Collection/Col…

https://twitter.com/edwardfishman/status/1497274167049306118

The composition of Russia foreign exchange reserves is shown in the chart on the left per assets class. On the right, the chart showing the geographical location of counterparties
or issuers of securities ie. the true place of residence of the assets. 2/

The geographical location of Russia's counterparties is:
- Russia (Gold) 23%
- China 13%
- Japan 12%
- Germany 12%
- France 10%
- USA 7%
- International financial institutions (IMF) 5%
- UK 4%
- Canada 2%
- Finland 2%
- Others 8%
3/

Now imagine that Western powers decide to impose sanctions on the Central Bank of Russia (CBR) like those imposed on some of the main Russian banks, prohibiting any dealing with the CBR. At a stroke none of the foreign counterparties would be able to deal with the CBR. 4/

Putin's war chest would in effect be worthless. Meanwhile the rouble has plunged. He would be entirely dependent for financing his army & his state on the sale of gas & oil in foreign currencies. Potentially the customers could dictate the price.He would be desperate to sell 5/

(assuming sanctions do not prevent him/Gazprom/Lukoil getting paid). The blackmailer would be caught at his own game in reverse. Now, if it looks so simple,it might be wrong. Things are rarely simple. But I would REALLY, REALLY like someone to explain clearly 6/

why this can't be done? Conventions ( it simply isn't done)? Treaties? Desire not to punish the Russian population? Fear of retortion? Please could someone competent & knowledgeable in those hyper complex topics of sanctions & geopolitics, explain it? Thank you very much. END

Ah, this article indicates that the US is considering sanctions on the CBR but not having a subscription, I was limited in my reading...
bloomberg.com/news/articles/…

Above article dated today 26 February 22

But I do subscribe to @fr which reported the same based on Bloomberg article

https://twitter.com/mafevema/status/1497662996323213327?t=R9lPWLI7RQFFWrs4clYcFg&s=19

And IT'S DONE! 👏👏👏 US, UK, Canada, France, Germany, Italy and the European Commission