Russian citizens are already suffering the consequences of the conflict with Ukraine as the European subsidiary of Sberbank, the main Russian bank, is short of cash.
Biggest Russian bank goes bankrupt
Thus, according to statements by the European Central Bank (ECB), Sberbank Europe AG would be in “bankruptcy or probable bankruptcy”, due to the crisis in Russia with the war in Ukraine.
Therefore, according to the ECB, the situation of the banking entity would have been caused by a massive wave of withdrawals of funds from its customers amid geopolitical tensions.
Thus, this would have caused a lack of liquidity that could not be reversed and that would prevent the institution from fulfilling its obligations, that is, the bank does not have the money to pay the withdrawal of all the people who have money in custody in the company.
“In the near future, the bank will likely not be able to pay its debts or other liabilities when they come due,” the ECB’s banking supervision division said, according to France24 news agency.
So while one of the biggest criticisms of BTC is that it has no ‘value’ and therefore would not have any liquidity, who is about to ‘default’ now is the traditional financial system itself.
Thus, the European financial authority considers that there are no positive prospects with “realistic possibilities” for the institution to restore its cash flow.
Meanwhile, shares of Sberbank (SBER) have fallen by more than 50% since the start of the conflict and the situation is only expected to worsen as Russian banks are to be excluded from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the main network of interbank trade on the planet.
Meanwhile, citizens on both sides are desperately trying to get their hands on the money. Just as the Russians chose to withdraw their funds from Sberbank, on the Ukrainian side there were very long lines to withdraw cash from ATMs, amid a blockade on electronic money transactions.