Britain’s Johnson tells finance he wants toughest possible Russian sanctions

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LONDON, Feb 23 (Reuters) – British Prime Minister Boris Johnson has told finance chiefs he wants the next round of sanctions against Russia to be as tough as possible, a government source said on Wednesday.

Johnson met with regulators and heads of major banks and financial sector industry groups to discuss the government’s approach to sanctions against Russia after Moscow heightened fears of a full-scale invasion by acknowledging the separatist regions of Ukraine.

The government source said the prime minister said at the meeting that he wanted the “hardest possible next tranche” and believed it would “make a difference and change the outcome. (Russian President Vladimir) Putin must fail.”

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In addition to this week recognizing the two rebel regions backed by Moscow, Putin this week ordered the deployment of Russian troops there as “peacekeepers”. Read more

Britain responded by imposing a first round of sanctions on five Russian private banks on Tuesday, including Bank Rossiya, which the government said was owned by Russian billionaires with direct links to Putin.

Participants in Wednesday’s meeting with Johnson included UK banks Lloyds, Barclays, NatWest and HSBC, US banks Goldman Sachs, Citi and Morgan Stanley, as well as the Financial Conduct Authority and the Bank of England.

Finance officials told Johnson there was “a very clear idea of ​​the direction of travel” from a “well calibrated package”, the government source said.

Johnson said he wanted to work with the financial industry to ensure the sanctions announced so far “really carry weight”, particularly if all major financial centers act at the same time.

“It’s not easy. I’m a former mayor of London. I know how important it is for our city to be open for investment, so these are tough issues to deal with,” Johnson said at the meeting, the government source said.

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Separately, Bank of England Governor Andrew Bailey told lawmakers it was “absolutely important” that the sanctions be enforced rigorously.

“Everyone involved needs to get on with it,” Bailey told the House of Commons Treasury Select Committee.

“The situation is so serious…I don’t think saying ‘well, it might be a little damaging to London as a financial centre’ is really just a valid argument.”

The British banking system’s exposure to Russia is very low and there is no systemic threat to the financial system from the sanctions, Bailey said.

Johnson also told parliament on Wednesday that Britain would prevent Russian companies from clearing in pounds and dollars.

The London Stock Exchange, whose LCH branch clears trades in both currencies, declined to comment.

The financial industry is waiting to see if future government sanctions include curtailing Russia’s access to Swift, a Belgium-based messaging system used by banks around the world.

Under the sanctions announced on Tuesday, market participants must refrain from dealing with or making available the funds or assets of banks and named persons.

The FCA has said it expects companies to have checks in place to ensure they are complying with financial sanctions obligations.

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Reporting by Huw Jones and Elizabeth Piper; Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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