America and the European Union extended sanctions on Russia this week. Russia has suffered capital flight, worsening business conditions and an 8% drop in the rouble against the dollar since the beginning of the year, when the troubles in Ukraine started. Although domestic banks dominate the market in Russia, foreign banks’ claims on Russia were $219 billion at the end of 2013, according to the Bank for International Settlements (BIS). French banks have the most claims, at nearly $50 billion, but Austrian ones are most exposed relative to their total foreign lending. The BIS estimates that foreign banks have a further $151 billion in exposure to Russia from derivatives, guarantees and credit commitments.
