Business - Euroclear warns EU that Russian frozen asset plan could lead to higher borrowing costs

EU's Plan to Use Frozen Russian Assets Could Lead to Higher Borrowing Costs for Member States, Says Euroclear.

A European depositary firm has warned that the EU plan to use frozen Russian state assets to back €140 billion in loans to Ukraine could lead to higher borrowing costs for member states. Euroclear, a major player in EU's financial infrastructure, is particularly concerned about this prospect as it may impact the stability of the bloc's financial markets.

According to sources close to the matter, this warning comes at a time when EU officials are struggling to come up with alternative solutions that can mitigate the risks associated with using frozen Russian assets. The situation remains fluid, and any attempts to implement such plans would require significant international coordination and cooperation.

It is worth noting that this latest development has sparked fresh concerns about Russia's economic isolation following the imposition of sanctions by the West in response to its actions in Ukraine.

I just got back from the most amazing trip to Japan , and I was thinking, have you guys tried those new-fangled ramen noodles? Like, they're a whole different level of flavor explosion! But anyway, back to this EU thing... I wonder if anyone's considered how using Russian assets would affect the global economy in a bigger picture kinda way? Like, what if it sets off a chain reaction or something? Not trying to be alarmist, but just thinking out loud

I'm not a fan of this idea ... if the EU wants to use frozen Russian assets as collateral for loans, shouldn't they at least consider other options that wouldn't increase borrowing costs for member states? Like, I get that Russia's got some serious economic baggage right now, but we don't wanna make it worse by creating more financial headaches in Europe . Can't they just find a way to work with international partners or something? This sounds like a classic case of "we can't help ourselves"... when the real question should be "should we even try?"

I'm telling ya, using frozen Russian assets as collateral for EU loans is a recipe for disaster ! I mean, you're basically asking member states to take on way more risk than they should be dealing with. It's like trying to lend money to a friend who's got a bad habit of overspending – it's just gonna end in trouble .

And don't even get me started on the potential impact on financial markets ! If things go south, we're talking systemic risk, folks. The whole thing is just too convoluted for my taste. I mean, can't they come up with a better plan than this? It's like they're playing with fire and expecting it to not burn them .

Anyway, I'm all for finding ways to support Ukraine, but let's do it in a way that doesn't put the whole EU at risk . We need stability, not chaos .

I'm a bit worried about how this whole thing could go down . I mean, using frozen Russian assets as collateral for EU loans might seem like a good idea at first, but think about it... if those assets are stuck in Russia and can't be easily liquidated, what happens when the market gets all nervous? We're talking potential flashpoints here .

And have you considered how this could affect individual member states' borrowing costs? If they end up being tied to the EU's loan plan, that might put a squeeze on their own budgets . I'm not saying it can't be done, but it seems like there are so many variables at play... it's hard to see a clear path forward .

It's also interesting to note how this ties into Russia's economic isolation. Are we just digging ourselves deeper into this hole? I'm all for holding Russia accountable, but maybe we should be thinking about the unintended consequences of our actions too...

idk why eu is worried bout using frozen russian assets lol like they think russia is just gonna give them back some cash or something . it's like, you froze their money, now they gotta pay us back... basic economics, right? and euroclear is all like "oh no, this might affect our profits"... sounds like someone who doesn't want to do the hard work of figuring out a solution . i mean, can't they just find another way to support ukraine without putting their own economies at risk?

Wow , this plan sounds super complicated! I mean, using frozen assets to back loans might seem like a good idea, but it could definitely have some major consequences for EU member states. Higher borrowing costs could be a big problem if they're not careful... that would just add to the stress of already dealing with economic uncertainty in Ukraine .

omg i just saw this thread from a few days ago ... so like i'm no economist but it sounds crazy to me that using frozen Russian assets to back loans could lead to higher borrowing costs for EU member states... isn't the point of doing that to save them money or something? anyway, i think it's kinda clever of Russia to be trying to get its assets back and avoid getting frozen for good...

I'm kinda worried about this EU plan ... if it goes through, it could mean higher borrowing costs for member states, which isn't ideal for the economy . I get that they wanna support Ukraine and all, but using frozen Russian assets is a risk . It's like trying to use someone else's debt without knowing how stable their finances are . Euroclear seems to be spot on with its warning – we need more stability in our financial markets, not less . I'm curious to see how this all plays out, but I hope EU officials can come up with a better solution that doesn't impact the whole bloc .

I don't get why the EU wants to use frozen Russian assets anyway... isn't it kinda like taking money from a friend who owes you and then using that money as collateral for more loans? It sounds like they're just passing on the problem to their own members states. And now Euroclear's worried about higher borrowing costs? That just makes sense if they have to use other people's money to back up these loans... it's all getting pretty confusing

I'm not sure I'd be too comfortable with this plan ... I mean, if EU member states are going to borrow money using Russian assets, it's like they're taking a risk that could potentially blow up in their faces . I get the need to support Ukraine, but shouldn't there be more solid foundations for lending out money? It seems to me like a bit of a gamble ... what if these loans default or something? Wouldn't that be bad news for those member states? And what's the plan B, anyway? It sounds like everyone's scrambling to find an alternative solution, but it's not exactly clear what that would look like .