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The Effects of Sanctions on Russian Banks in TARGET2 Transactions Data

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  • Drott, Constantin
  • Goldbach, Stefan
  • Nitsch, Volker

Abstract

This paper examines the effect of financial sanctions at the most disaggregated level possible, individual bank accounts. Using data from the Eurosystem’s real-time gross settlement system TARGET2, we provide empirical evidence that sanctions imposed by the European Union on Russian banks following Russia’s aggression against Ukraine in 2014 and 2022 have sizably reduced financial transactions with sanctioned Russian bank accounts, both along the extensive and intensive margins. Among the various sanction measures taken, exclusion from SWIFT, a global provider of secure financial messaging services, turns out to have the largest effects.

Suggested Citation

  • Drott, Constantin & Goldbach, Stefan & Nitsch, Volker, 2024. "The Effects of Sanctions on Russian Banks in TARGET2 Transactions Data," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 142468, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:142468
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/142468/
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    Cited by:

    1. Devasmita Jena & C. Akash & Prachi Gupta, 2024. "Deflecting economic sanctions: do trade and political alliances matter?," International Economics and Economic Policy, Springer, vol. 21(3), pages 543-567, July.
    2. Antonis Ballis, 2025. "Geopolitical Tensions and Financial Networks: Strategic Shifts Toward Alternatives," Papers 2505.21480, arXiv.org.

    More about this item

    JEL classification:

    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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