Wall Street Banks Could Lose Billions In Russia--Here's How Much Exposure They Have

[Yo_Mama_Been_Loggin]

Topline

The conflict in Ukraine has caused many of Wall Street’s biggest banks to begin winding down their business in Russia, but they could still face billions of dollars in losses as they reduce exposure and divest from Russian firms amid a barrage of Western sanctions.

Key Facts

While it will likely be a drawn-out process for banks to unwind their operations in Russia, some firms have higher exposure than others—meaning greater potential losses if borrowers default on a payment—but for most, Russian investments still represent a small portion of cumulative assets.

JPMorgan Chase CEO Jamie Dimon said in an annual shareholder letter on Monday that the bank was “not worried” about direct exposure to Russia, though he admitted, “we could still lose about $1 billion over time.”

Citigroup will be among the most impacted on Wall Street, however, with total exposure to Russia amounting to almost $10 billion at the end of 2021—and the bank could lose nearly half of that in a worst-case scenario, it said last month.

Goldman Sachs, meanwhile, has said that it had Russian credit exposure of around $650 million by the end of 2021, but losses from divested assets should be “immaterial,” sources told Reuters last month.

https://www.msn.com/en-us/money/news/wall-street-banks-could-lose-billions-in-russia%e2%80%94heres-how-much-exposure-they-have/ar-AAVQyAa

My guess is Russia is considered higher risk so these banks probably charged them more. Those are the breaks.

[hatrack]

1. Just when you think you can't take any more tragedy!!

Now this!!!

[BeyondGeography]

4. Lmao

[Sherman A1]

2. Oh,

[WarGamer]

3. California State retirement funds will lose around $1B... if the securities become worthless.

[Mr.Bill]

8. Fortunately for the retirees,

their pension funding is guaranteed by the taxpayers of California. So that spreads it out to most of the state. One billion dollars is a lot of money, but for perspective a certain washed-up action movie star who was governor ran up 43 billion in debt. Of course, as usual, Democratic governors who came after him cleaned that mess up.

[The Magistrate]

5. Risks Were Calculated Poorly, Sir, It Seems

Investments in a country of that sort are always at risk, and if the investors did not see to quickly extracting sufficient value to insure themselves against potential loss in future, well --- sometimes you don't cover your point and crap out. Gamblers is gamblers.

[hatrack]

6. Like LTCM back in 1998 . . .

Thanks to the wonders of computer modeling and economic theory, the proprietors had run multiple simulations "proving" that their company's business model could not fail over multiple lifetimes of the universe.

As others have pointed out, this, uh, confidence led them to invest heavily in Russia, a gangster economy with nebulous property laws and at best a vague, passing resemblance to western economies in terms of regulation and transparency, "but if one had conquered risk . . . . "

And who ran to the rescue with OPM when the whole leveraged mess went tits-up? Why, the brilliant Alan Greenspan and the Fed, with billions in help from (all together now!!) Deutsche Bank, J.P. Morgan, Morgan Stanley, Goldman, Barclay's and on on and on and on . . .

https://en.wikipedia.org/wiki/Long-Term_Capital_Management#1998_bailout

[Hugin]

7. KnR for International Make A Russian Oligarch Cry Day.

I'm out. Keep the home fires burning.

[ZonkerHarris]

9. Suckers. That's what you get for thinking Russia was an investment grade nation. Idiots.