British Banks Join France in Opposing the Use of Frozen Russian Assets to Support Ukraine

British banks, echoing the stance of their French counterparts, have raised objections to a proposal to direct roughly $11 billion in frozen Russian assets toward supporting Ukraine, writes the Financial Times, citing industry sources. Bankers say London has offered no mechanism to compensate potential losses should Moscow retaliate.

An executive at a major bank said: «We are concerned about the legality of this… the government is setting a new precedent, as it has never seized assets in this way before. Russia will take them to court». An adviser working with leading creditors added: «The legal risk is that if Ukraine cannot repay, the asset would have to be seized—something the government considers its own, while Russia does not».

Earlier, France declined to participate in a proposed “reparation loan” for Ukraine that would rely on €18 billion in Russian funds frozen in French commercial banks. Officials in Paris say they broadly support the concept of such a loan but oppose drawing on assets held in private financial institutions, noting that these entities are bound by contractual obligations—unlike the Belgian depository Euroclear, which holds the bulk of the €165 billion.

France has also classified information about the financial institutions holding Russian assets and about how the income generated from those assets is distributed, citing the “confidential nature” of the data.