On December 16, international rating agency Fitch Ratings warned that Belgian depository Euroclear has been included in its list of negative rating observations due to potential liquidity problems and legal risks.
The warning specifically relates to potential liquidity issues and legal risks stemming from the European Commission (EC)’s plans to use frozen funds from Russia’s Central Bank to provide a reparation loan to Ukraine. Additionally, Fitch noted that the EU’s recent decision to permanently freeze Russian assets—rather than updating sanctions every six months—has heightened financial uncertainty and increased risks for Euroclear.
On December 12, the Central Bank of the Russian Federation announced it would file a lawsuit against Euroclear in Moscow’s Arbitration Court. The Bank of Russia stated that Euroclear’s actions have impaired its ability to dispose of funds and securities. The legal action was prompted by both the depository’s conduct and mechanisms within the European Commission for the direct or indirect use of Russian assets without consent.
In response, Euroclear has declared its readiness to defend itself in Russian courts. EC official Paula Pinho stated that the European Union is confident in the legality of using frozen Russian assets.
