IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v219y2024icp38-51.html
   My bibliography  Save this article

The effects of sanctions on Russian banks in TARGET2 transactions data

Author

Listed:
  • 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," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 38-51.
    • Handle: RePEc:eee:jeborg:v:219:y:2024:i:c:p:38-51
    DOI: 10.1016/j.jebo.2023.12.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268123004651
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2023.12.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tibor Besedeš & Stefan Goldbach & Volker Nitsch, 2017. "You’re banned! The effect of sanctions on German cross-border financial flows," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 263-318.
    2. Besedeš, Tibor & Goldbach, Stefan & Nitsch, Volker, 2021. "Cheap talk? Financial sanctions and non-financial firms," European Economic Review, Elsevier, vol. 134(C).
    3. Joakim Gullstrand, 2020. "What goes around comes around: The effects of sanctions on Swedish firms in the wake of the Ukraine crisis," The World Economy, Wiley Blackwell, vol. 43(9), pages 2315-2342, September.
    4. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
    5. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    6. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    7. Anna Miromanova, 2023. "Quantifying the trade‐reducing effect of embargoes: Firm‐level evidence from Russia," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 1121-1160, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tibor Besedeš & Stefan Goldbach & Volker Nitsch, 2024. "Smart or smash? The effect of financial sanctions on trade in goods and services," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 223-251, February.
    2. Mikhail Mamonov & Anna Pestova & Steven Ongena, 2023. "'Crime and Punishment'? How Banks Anticipate and Propagate Global Financial Sanctions," Swiss Finance Institute Research Paper Series 23-59, Swiss Finance Institute.
    3. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ina C. Jäkel & Søren Østervig & Erdal Yalcin, 2024. "The effects of heterogeneous sanctions on exporting firms: Evidence from Denmark," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 161-189, February.
    2. Mikhail Mamonov & Anna Pestova & Steven Ongena, 2023. "“Crime and Punishment”? How Banks Anticipate and Propagate Global Financial Sanctions," CERGE-EI Working Papers wp753, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Görg, Holger & Jacobs, Anna & Meuchelböck, Saskia, 2023. "Who is to suffer? Quantifying the impact of sanctions on German firms," Kiel Working Papers 2248, Kiel Institute for the World Economy (IfW Kiel).
    4. Teemu Makkonen & Timo Mitze, 2021. "Geo-political conflicts, economic sanctions and international knowledge flows," Papers 2112.00564, arXiv.org.
    5. Tibor Besedeš & Stefan Goldbach & Volker Nitsch, 2024. "Smart or smash? The effect of financial sanctions on trade in goods and services," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 223-251, February.
    6. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Political Economy of International Sanctions," Research Papers in Economics 2024-07, University of Trier, Department of Economics.
    7. 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.
    8. Crozet, Matthieu & Hinz, Julian & Stammann, Amrei & Wanner, Joschka, 2021. "Worth the pain? Firms’ exporting behaviour to countries under sanctions," European Economic Review, Elsevier, vol. 134(C).
    9. Gutmann, Jerg & Neuenkirch, Matthias & Neumeier, Florian, 2023. "The economic effects of international sanctions: An event study," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1214-1231.
    10. Aldunate, Felipe & Gonzalez, Felipe & Prem, Mounu, 2021. "Make the Economy Scream? U.S. Banks and Foreign Firms During the Cold War," SocArXiv bhwk7, Center for Open Science.
    11. Besedeš, Tibor & Goldbach, Stefan & Nitsch, Volker, 2021. "Cheap talk? Financial sanctions and non-financial firms," European Economic Review, Elsevier, vol. 134(C).
    12. Li, Haoran & Wan, Xibo & Zhang, Wendong, 2021. "How do Firms Respond to Long-term Political Tensions? Evidence from Chinese Food Importers," ISU General Staff Papers 202106020700001118, Iowa State University, Department of Economics.
    13. Gutmann, Jerg & Langer, Pascal & Neuenkirch, Matthias, 2024. "International sanctions and emigration," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    14. Davydov, Denis & Sihvonen, Jukka & Solanko, Laura, 2021. "Who cares about sanctions? Observations from annual reports of European firms," BOFIT Discussion Papers 5/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    15. Gustavo de Souza & Naiyuan Hu & Haishi Li & Yuan Mei, 2022. "(Trade) War and Peace: How to Impose International Trade Sanctions," Working Paper Series WP 2022-49, Federal Reserve Bank of Chicago.
    16. repec:zbw:bofitp:2021_005 is not listed on IDEAS
    17. Davydov, Denis & Sihvonen, Jukka & Solanko, Laura, 2021. "Who cares about sanctions? Observations from annual reports of European firms," BOFIT Discussion Papers 5/2021, Bank of Finland, Institute for Economies in Transition.
    18. Daria Suprunenko, 2024. "Ukrainian export and production after the 2014 Russia shock," IEER Working Papers 124, Institute of Empirical Economic Research, Osnabrueck University.
    19. Piotr Lukaszuk, 2021. "You can smuggle but you can't hide: Sanction evasion during the Ukraine crisis," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 71(01), pages 73-125, December.
    20. Bondarenko, Yevheniia & Lewis, Vivien & Rottner, Matthias & Schüler, Yves, 2023. "Geopolitical Risk Perceptions," CEPR Discussion Papers 18123, C.E.P.R. Discussion Papers.
    21. Li, Haoran & Wan, Xibo & Zhang, Wendong, 2020. "How do Firms Respond to Political Tensions? Evidence from Chinese Food Importers," ISU General Staff Papers 202011250800001118, Iowa State University, Department of Economics.

    More about this item

    Keywords

    Financial flows; Transactions; Restrictions;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:219:y:2024:i:c:p:38-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.