{"id":38178,"date":"2025-11-04T11:42:31","date_gmt":"2025-11-04T08:42:31","guid":{"rendered":"https:\/\/ces.org.ua\/?p=38178"},"modified":"2026-02-19T20:14:08","modified_gmt":"2026-02-19T17:14:08","slug":"were-getting-russias-assets-problem-wrong","status":"publish","type":"post","link":"https:\/\/ces.org.ua\/en\/were-getting-russias-assets-problem-wrong\/","title":{"rendered":"We\u2019re getting Russia\u2019s frozen assets problem wrong"},"content":{"rendered":"

I happened to spend most of my economist\u2019s career within the cozy walls of European academia. <\/strong>Models I used learn and then teach and use in my research were beautiful and rational. According to them, intelligent and benevolent policymakers thoroughly analyse the available information in order to come up with a decision that would be beneficial for a broad society. Not that I believed in that fanatically, but classical education can bias the perception of reality.<\/p>\n

Needless to say, when I switched to work for a Ukrainian think-tank, this felt like a cold shower.<\/strong> OK, actual economic policymaking can be chaotic, full of conflicting stakeholders\u2019 interests, and occasionally steered by opaque forces. But can we at least do our best to make rational, useful, and well-informed decisions? <\/strong>Let me use this rhetoric question to introduce the core question: what\u2019s wrong with Europe\u2019s current debate about the use of Russian assets.<\/strong><\/p>\n

Russian assets were immobilised back in 2022, and Euroclear manages more than 60%<\/a> of them. The income from these assets (the so-called extraordinary revenues, or ERA) is already flowing to Ukraine. Yet financing needs remain high, prompting a debate on the possible use of assets themselves. In this debate, many European politicians keep an overly cautious position<\/a>. Confiscation might<\/a> rattle markets, raise legal risk, and push investors to demand higher yields, thus adding to debt pressure. Or it might not. The problem is, too few actually bothered to check.<\/p>\n

No, seriously. I managed to find just several economic studies on the consequences of Russian assets immobilisation and, potentially, confiscation (here, I refer to the actual research based on empirical data and transparent methodology). To satisfy my curiosity<\/strong>, I initiated own research<\/a>.<\/p>\n

To start with the basics, EU sovereign bonds increased since the beginning of 2022 (the magnitude varied, but the direction remained uniform across the members). In the list of potential drivers (including, but not limited to, full-scale war on the continent and ECB\u2019s tightening monetary policy to surpass \u2018putinflation\u2019), immobilising Russian assets is unlikely to be the dominant one. But set intuition aside. How can we test this empirically?<\/p>\n

Asset prices are primarily shaped by investors\u2019 perception and expectations (otherwise, market bubbles would be impossible). Fundamental factors matter, but sentiment comes first. EU sovereign bonds are sufficiently liquid and accessible for common (non-professional and non-institutional) investors. Therefore, if investors were averse to Russian assets immobilisation and usage (including potential confiscation), yields would react within days after the news announcement.<\/p>\n

They didn\u2019t. Markets barely blinked at news of immobilisation. Usage announcements mostly affected 10-year bond yields, in line with the premise that investors perceived higher legal and retaliation risk. But effect was short-lived: it reached its maximum on the 4th\u00a0day after the announcement and vanished within 2 weeks. And event at its maximum, the magnitude of the shock resembled a typical one-notch credit-rating-downgrade effects in Europe (i.e., well below crisis-episodes’ repricing). Fears that more decisive steps will hit some countries stronger than others seem exaggerated: in medium run, most of shock was absorbed by the common EU factor. And on top of that, first news on the debates about actual confiscation on Russian assets were no different on other usage news in the eyes of investors.<\/p>\n

Of course, event study method has its limitations. But with a branch of placebo tests and a pinch of black statistical magic, one can be reasonably certain about the results. The risks are present, but they are moderate and manageable. \u00a0Europe\u2019s bond markets seem far less anxious than some of its politicians: based on past experience, given that immobilisation precedent already occurred, full confiscation will unlikely come as a major shock.<\/p>\n

I\u2019d like to put my cards on the table: I am personally interested in using Russian assets to support Ukraine. I believe no social-science researcher is perfectly unbiased; the best we can do is stay transparent about our background and motivation. Of course, some parties feel threatened by the EU plans to go a step forward with the Russian assets. And yet, arguments must pass the reality check. Given the premise \u2013 moderate, manageable market risks; EU\u2019s won funding constraints; and Ukraine\u2019s need for funds stay resilient \u2013 it logically follows that Russian assets should be transferred to Ukraine.<\/p>\n","protected":false},"excerpt":{"rendered":"

I happened to spend most of my economist\u2019s career within the cozy walls of European academia. Models I used learn and then teach and use in my research were beautiful and rational. According to them, intelligent and benevolent policymakers thoroughly analyse the available information in order to come up with a decision that would be […]<\/p>\n","protected":false},"author":10,"featured_media":37473,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[149,200],"tags":[608],"experts":[500],"news_type":[179],"class_list":["post-38178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs-en","category-news-list-en","tag-russian-assets-en","experts-yana-ohrimenko","news_type-blog-type"],"acf":[],"_links":{"self":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/38178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/comments?post=38178"}],"version-history":[{"count":3,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/38178\/revisions"}],"predecessor-version":[{"id":40462,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/posts\/38178\/revisions\/40462"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/media\/37473"}],"wp:attachment":[{"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/media?parent=38178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/categories?post=38178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/tags?post=38178"},{"taxonomy":"experts","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/experts?post=38178"},{"taxonomy":"news_type","embeddable":true,"href":"https:\/\/ces.org.ua\/en\/wp-json\/wp\/v2\/news_type?post=38178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}