Biden ups Russia sanctions, calls Ukraine invasion underway

Bloomberg

US President Joe Biden unveiled sanctions targeting Russia’s sale of sovereign debt abroad and the country’s elites, responding to what he described as the start of Vladimir Putin’s invasion of neighboring Ukraine.
“He’s setting up a rationale to take more territory by force,” Biden said at the White House. “This is the beginning of a Russian invasion of Ukraine.”
Biden said he’s sending additional US troops to the Baltics in a move to defend Nato countries. And the president said sanctions will increase if Russia “continues its aggression,” calling the penalties he announced a first step. The measures stopped short of the devastating steps that the U.S. and its allies have threatened. Crude oil futures in New York pared gains after Biden spoke, while US stocks bounced off session lows. The S&P 500 Index finished down 1%.
The sanctions come after Russia’s President Putin recognized two self-proclaimed separatist republics in eastern Ukraine as independent, a dramatic escalation in his standoff with Ukraine and its supporters in the West. Putin has denied Russia intends to invade Ukraine.
Biden said he’s imposing “comprehensive” sanctions on new issuances of sovereign debt. “That means we’ve cut off Russia’s government from Western financing,” he said. “It can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either.”
“In the short term, this is unlikely to have a major impact on Russia’s economy,” Clay Lowery, executive vice president of the Institute of International Finance, said of Tuesday’s actions. “But in the longer-term, this action, combined with other actions from European countries, is likely to hinder Russia’s economic growth.”
Daleep Singh, the deputy US national security advisor for international economics, told reporters at the White House that “this was the beginning of an invasion, and this is the beginning of our response. The actions we took today were only the first tranche.” He added, “We are ready to press a button to take action on the two largest Russian financial institutions, which collectively hold almost $750 billion in assets, or more than half of the total in the Russian banking system.”
Additionally, US Secretary of State Antony Blinken told reporters that he has canceled plans for a meeting Thursday in Geneva with his Russian counterpart, Foreign Minister Sergei Lavrov, saying it “does not make sense” after Russia’s moves in Ukraine.

Banks Targeted
Instead of hitting Russia’s biggest banks, as some investors had feared, Tuesday’s penalties targeted state-owned banks VEB.RF and Promsvyazbank, which the U.S. said hold more than $80 billion in assets and finance the Russian defense sector and economic development.
The US measures will freeze the banks’ US assets, ban Americans from doing business with them, cut them off from the global financial system and eliminate their access to the dollar.
Biden said Russia’s elites “share the corrupt gains of the Kremlin policies and should share in the pain as well.” Three Russians who are part of Putin’s inner circle — Sergei Kiriyenko, Aleksandr Bortnikov, and Promsvyazbank Chief Executive Officer Petr Fradkov — will be hit with penalties blocking them from the US financial system, as will some relatives.
The president said the US is also working with Germany to ensure the Nord Stream 2 pipeline from Russia to Germany won’t move forward.
“As Russia contemplates its next move, we have our next move prepared as well,” Biden said. “Russia will pay an even steeper price if it continues its aggression, including additional sanctions.”