The measures are designed to cover the majority of banking assets in Russia but stopped short – so far – of kicking the country out of the global banking system known as SWIFT.

The US has imposed sanctions that cover almost 80 per cent of all banking assets in Russia in protest at President Vladimir Putin’s military invasion of Ukraine. The measures add to those taken by the European Union and UK in past days.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) yesterday imposed “expansive economic measures,” in partnership with allies and partners, that target the core infrastructure of the Russian financial system — including all of Russia’s largest financial institutions and the ability of state-owned and private entities to raise capital — adding a further bar to Russia from the global financial system. 

“If necessary, we are prepared to impose further costs on Russia in response to its egregious actions,” Secretary of the Treasury, Janet Yellen, said in a statement.

The US is targeting Russia’s two largest financial institutions: Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank). Every day, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 per cent of which are in dollars, the government said.

The US government also said that it will impose correspondent and payable-through account sanctions on Sberbank. 

“Sberbank is uniquely important to the Russian economy, holding about a third of all bank assets in Russia,” the Treasury department said. “It holds the largest market share of savings deposits in the country, is the main creditor of the Russian economy, and is deemed by the GoR to be a systemically important financial institution. Within 30 days, OFAC is requiring all US financial institutions to close any Sberbank correspondent or payable-through accounts and to reject any future transactions involving Sberbank or its foreign financial institution subsidiaries,” it said.

There have been calls for Russia to be cut off the global banking system known as SWIFT. Being cut out of the system would hit Russia hard, although foreign creditors doing business with the country would also be affected.