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Seizing central bank assets?

Author

Listed:
  • Ferrari Minesso, Massimo
  • Krahnke, Tobias
  • Mehl, Arnaud
  • Vansteenkiste, Isabel

Abstract

We study the global impacts of sanctions on central bank assets. We build a database on freezes and seizures of central bank assets spanning 1914–2024. We show that the scale of the freeze on today’s Central Bank of Russia’s assets is rarely seen in history and that non-belligerent countries have never seized central bank assets to finance reconstruction in a third country in an ongoing war. We propose a three-country DSGE model to understand the global impacts of sanctions on central bank assets and tease out the macroeconomic mechanisms. One insight of the model is that seizing central bank assets can result in adverse effects on the sanctioning country in general equilibrium. Calibrated model simulations suggest that seizing Russia’s immobilized sovereign assets could result in higher interest rates on sanctioning countries’ government bonds. The increase in interest rate payments could surpass the assets’ amount seized after about three years.

Suggested Citation

  • Ferrari Minesso, Massimo & Krahnke, Tobias & Mehl, Arnaud & Vansteenkiste, Isabel, 2026. "Seizing central bank assets?," Journal of International Economics, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:inecon:v:163:y:2026:i:c:s0022199625001643
    DOI: 10.1016/j.jinteco.2025.104207
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    Keywords

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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • F30 - International Economics - - International Finance - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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