How Seizing Russian Assets Will Change the Invasion of Ukraine 

"Special banking operation" had me in tears 😂

I had been calling it a seizure, but Special Banking Operation is way funnier

"Special Banking Operation" had me laughing so loud that I startled my dog

Holy fuck Special Banking Operation would be such a funny way to describe it, especially if the US called it that too

Probably worth mentioning that if Ukraine gets the full $300B and uses it to buy Western weapons (where they would otherwise receive the same weapons as donations), it's essentially a transfer to the West.

I’ve said this before but in my opinion at this point the best course of action is to give me the assets.

We have a saying in Spain: "100 years of forgiveness for the thief who steals from another thief"

“Get excited because it’s time for lines on maps” Physically starts wiggling with glee

9:15 "Without any clear benefit to anyone." The bloodsucking lawyers--- "Are we invisible to you?"

Belgian here, we're supposedly using the interests gained on the money parked here to fund aid to Ukraine.

I will never stop watching this channel

And now the question: You have money from other countries stored in your country, you have confiscated the money of one side, what will the rest do? Correctly, they will start withdrawing their money, what if you consider them not democratic enough and try to steal money from them?

Good discussion , however, Russia sees this fight as an existential fight… 300 billion isn’t a leverage point

“Special banking operations” 😂

Such a huge fan of your videos. So well put together and in depth. I wish you’d been one of my collegiate professors

Fantastic explanation of expectations versus reality of asset seizure.

I don’t know how many people remember, but Russia has already seized Western assets- the Western built and financed airframes used by Russian airline operators.

I hope you googled Russia's national external debt - they will simply call it paid which will be a net 0

Heck yes! Congratulations on being included among peers in a journal; always good stuff!

Congrats for your publication!

One point not mentioned in the analysis: the threat of seizing the money may have either 1) already been internalized by russia, or 2) may have been given odds so low by Russia as to not be an effective threat anymore. In the first case, Russia would have already written off the funds as lost, or as an acceptable cost for the war, at which point they no longer represent bargaining power. In the second case, Russia was essentially calling our bluff, only to learn now that we’re following through on the threat. These situations correspond to Russia putting a near 100% or near 0% probability on our threat to seize, respectively. In either case, it’s effectiveness as leverage is far outweighed by the resource’s value. We can’t know if these possibilities are actually at play here. But we might be able to learn if the 0% case is at play if Russia responds by internalizing the revealed information that the threat is genuine, and then attempting to bargain to stop the follow through.

It’s all about the money, honey.

Congrats on publishing!!

William a very good video demonstrating the ebb and flow of Sequestrated Cash as well as the dangers associated with it. Thank You. Congratulations on your Peer Review.

Sieze US assests all over the world to provide assitance to Iraq to adress damage resulting from the unlawful invasion by the US ? I mean we can use this logic in many cases i don't think world economy works that way but we will see.

It's not just the amount of treasuries china holds but their duration. China was I believe already moved mostly into short term treasuries and thus are rolling them over relatively rapidly. Which means they can get out or reduce their position relatively rapidly. So to get accurate sense you have to know both total and distribution of durations.

Yes, Lines on maps!👍 Great video William. I enjoy it every time

It's not 'theft', it's a totally legal financial annexation

I like the "special banking operation", it sounds somewhat familiar.

Either way $300+ billion dollars is A LOT of money, it's at least a few years worth of support and it'll go a long way in this war, it'll also allow other countries that are currently donating a lot to focus more on building up their own stock again.

Congrats on your publication! I definitely appreciate your academic expertise in your videos so I'm glad your videos gave back a little to your academic side as well.

I would call it an emergency strategic absorption of funds.

300 billion in exchange for whole of Ukraine seems like a fair trade.

Imagine your trusted bank changing the rules and taking your money; looking at you Canada. The affect this would have international commerce would last for generations. Any penalty levied against Russia must come from a legal or governing body that is more broadly representative of the world. Not just the US House of Representatives.

Great examination of potential uses and costs! Complex gamble!

Outstanding - you seem to be in good form! We even have the after book plug joke back in. Additional bonus points for the jokes about special banking operation and more. Oh - and I thought the analysis was great too.

The "one-time cost" argument only works if the alternative is threatening seizure at the final negotiating table. A one-time cost that (your opponent believes) you'd never be willing to use has no coercive power in the first place. Of course there are other important arguments about the global consequences of seizure but looking solely at the Ukraine War, it's a tradeoff between the coercive power of the contingent $300bn seizure at the final bargaining table, and the change in the expected military outcome from giving Ukraine $300bn.

Congrats on the peer review publication. This sounds like a wonderful tool. Keep up the good work.

Thank you William for giving me the opportunity to watch your videos.

Thank you for ensuring widest possible access to peer reviewed data.

The book segway is getting smoother every video Neat.

Congrats on your publication 🎉

Thsnk you William. Much appreciated

“A special banking operation?” Priceless!

"Special banking operation" 100% has to be the official name for it, whether you're for or against.

I believe the lawyers have already given their opinion on this 'legal theft'. Two things of note. The interest earned on those assets has the same legal status as the assets themselves. It is therefore useless to try separate the treatment of the two. Then there is the threat of Russia seizing western assets in retaliation. This will not be restricted to assets within Russian borders. What you will end up with is a very unstable economic position for all. There have already been examples of what happens when European countries have tried to seize Iran's assets. Economic piracy is not beneficial to the West, better tread carefully.

Haha no way! Putin pulling coins off a massive frozen piggy bank? The Willy Span Picture Cache just keeps on giving!

Can't make any promises, but I'll make some time to read your papers! Thank you!

Sounds like this is the same as with small nuclear weapons, they're strongest when they are not used, but have a potential of being used

I almost had a seizure hearing that word so often, so I will refer to it as a 'special banking operation' from now on. That option sounds the best to me.

Your channel is fantastic. Thanks.

Great analysis! Thank you!

Hey babe wake up a new William Spaniel video just dropped

They break it, they pay it.

I just now noticed that I had been "unsubscribed". I did not do it. I'm glad I noticed. Thanks for the video!

Dude congrats on the paper!

Thats not going to give other nations a reason to join BRICS at all

The morally correct choice is obvious and I'm amazed this still a debate.

Stellar work and presentation ❤❤❤❤

Thank you for makeing these informational videos

BRICS, a golden opportunity!!!!!!!!!!!! Take it.

lines on maps

Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it. Take it.

"It will change the invasion" ... -Yeah right! 😘

Do you imagine if Winterfell saved money to invade Kingslanding, but save it with the Lannister? What would be the most logical thing to happen? The Lannister doing a special banking operation

My favorite part was where smart man shows lines on maps! Just kidding, interesting points and a lot to ruminate on. Keep up the good work sir!

The problem with using leverage too late is that it’s value changes with the state of the war. If russia takes half of kiev before such negotiations start, they will lose alot of value, since the outcomes of using it will be worse than using it while ukraine has more bargain power. This leverage is a power multiplier during negotiations, not a flat amount.

The thing is the roadblock is actually not the Russians or their response, but the downstream implications. Take at the look at the list of the largest sovereign wealth funds in the world. Notice what countries are on in the top? Saudi Arabia, China, Kuwait, UAE all sitting on trillions of dollars, all with shady human rights record. If Europe decides that a war in which they are not part of is enough of a justification to seize assets, then suddenly all of those countries' wealth is liable to be seized. (Saudi Arabia, Kuwait, UAE literally invaded Yemen, China and Taiwan). There could be a chilling effect in which those countries might decide to deprioritize Europe relative to the rest of the world. Why does that matter and why are the Americans less afraid of it? Well Europe has been struggling for a long time of their capital markets being second fiddle to the US capital markets. Companies large and small are ditching European exchanges to go to America, start-ups are decamping to the US because it is easier to get funding, etc. If the Saudis, Chinese, Kuwait and UAE governments of the world decide Europe is not even worth to hedge against US political risk, then Europe is permanently dooming it own capital markets.

This money has already been written off by Russia and figured into financial analysts models. Seizing it will, however, provide a strong incentive for any entity not entirely 'pure' according to the EUs alleged 'values' to park its money elsewhere. Hello BRICs

Lines on maps AND a graph! It's a good day.

China is collapsing right now. So hard to care about what China feels. Not that the question shouldn't be brought up, but focus should be on the rest of the world.

Here’s an Question: What would be better for Ukraine in the long run: ⚪️Donating ALL of the frozen money to Ukraine (give or take $300 Billion) in one huge lump sum, and thus saving their NATO Allies that much in donations for the next while, but potentially opening the door to a slew of nasty future complications? ⚪️OR Donating the totally of said sum’s collecting interest from since the day it was frozen, and continuing to do so until the day the war is concluded either way, giving Ukraine Less money up front BUT giving them a steady lifeline of money that could possibly eclipse the initial sum if the war drags on long enough anyway, without also opening the can of worms the first option would entail?

Interesting that Switzerland doesn't have a measurable amount of the Russian overseas sovereign wealth.

14:23 as a long time Irish subscriber this is the best mention of Ireland yet

Great analysis; just one thing about the one-time cost: could sieze assets a bit at a time. First take the interest earned as a warning shot, and keep doing that so inflation eats the real value

"special banking operation" i spat out my coffee lmao

Thanks for the Canada reference lol.

I heard a real life story about a one time cost. A couple decages ago the New Orleans Police forces was threatening to go on strike shortly before Mardi Gras. That, off course created a mild panic (if there is such a thing). Then the police made the strategic mistake of actually going on strike. And the city got down to the job of what to do about the problem and the police lost all their leverage and public attention. As a proverb you might say; Leverage is like a hostage.

I would be more concerned about how the seizure would affect the world financial system. I think not to the benefit of the West. Who would want to invest in the West when they know their money might be confiscated and never returned?

You want the "soviet empire" back? Sure, you can have it just like it was in the late 80s.

Many nations are selling their dollar bonds and buying gold or saving their currency like Japan and China.

Good point

8:53 Well, having worked governmental law for a decade now I'm willing to take a gamble. Even across jurisdictions, in law a few things tends to matter: 1 - Who does what, who is the actor? Actors are the one who can commit an 'unlawful act' as most law systems define it, and face consequences for doing so. Remember: If you do something that's not unlawful, that's your prerogative, it wouldn't be legal otherwise. You can never be punished for doing something legal. Example: If I sell a 125K house for 230K because the market is crazy, that is okay. If I sell a 125K house for 230K because I lied and hid structural defects, that's an unlawful act and I can be sued. If they sue me for 'The market is crazy so we had to bid that high voluntarily to get it, now we demand his money', my defense will be to shrug, grin, and watch the judge berate the buyers. 2 - Which law field governs a matter? It's pretty widely established that private law forms (contract law, civil law, etc) should not intrude on governmental law. It would be anti-democracy as private contracts could outstrip the power of elected governments. Jumping across law fields so one intrudes on the other is rare. Analysis: The US government (actor 1) acts to seize Russian regime (actor 2) funds. This is their prerogative as per the power invested in them via elections, governed under US governmental law. Simpletons (actor 3) who still had money in Russia did so of their own free will, likely a profit or tax evasion motive. The theft of that is under Russian governmental law. Does an act by the Russian regime (actor 2) in Russia under governmental law, create a private law obligation in the US, because the US government did something that's their prerogative under US governmental law? No it does not. Neither the actors nor the law fields have a direct relation. What actor 1 does to actor 2, has no direct bearing on what actor 2 does to 3: That's actor 2's fault. Unless you have a signed contract by the US state secretary saying 'We feel obligated to compensate you for you perpetrating tax fraud with Russian accounts, you voluntarily agree that you may sue us, we love US tax dollars going to the criminal underworld and the semi-criminal level of international business'. Simpletons sueing the US government for losing their tax defrauding Russian account should fail, should probably be marked as malicious litigants, and should be sanctioned in the legal sense. I've long argued to disbar lawyers who take on such meritless cases.

I like Special Banking Operation......excellent...

We just gonna steal the money and assume the rest of the world is cool with us doing that? 😂

Thabk You William ❤

See, I've always had the notion that when someone's bank account and assets get "frozen", the owner basically writes off the account on the assumption that the money will be "confiscated" in a special banking operation by the government. This is interesting to hear being debated because it's exactly what I thought was already happening for years.

17:35 if the seizure does not in fact create bargaining leverage, and here it does not, you might as well impose the one time cost and seize.

Can you take a little every month the war goes on?

man, the way you distill the cascading paradox of war in 2024🤯

Author ignores the other side of the Balance Sheet. Western Investors have roughly $600 bln of Russian assets. Roughly 300 bln of that is Equities and Bonds while another half is private Debt and private Equity think of Oil megaprojects. It seems both sides have significant exposure, but Western frozen assets in Russia get hardly any coverage in the press. I used Brookings Institute stats would be curious if there is another source for the numbers.

For anyone struggling with the concept that the cost of war decreases for Russia if Ukraine gets frozen assets, you can think of it another way. Think of the unseized frozen assets as a benefit or incentive. Russia is incentivised to end the war to the tune of 300 billion dollars. Giving this to Ukraine removes Russias incentive to end the war. The greatest leverage is in threatening to give it to Ukraine but keeping it frozen to stay as an incentive to negotiate. A possible 3rd option I've not heard could be to keep the 300 billion dollars frozen but adjusting it to the rate of dollar inflation so the incentive or effective cost of war stays about the same for Russia, and then any increase in value of the assets beyond the rate of dollar inflation could be given to Ukraine.

8:50 That's like suing opec for inflating the price of oil

Seizing the interest and sending it to Ukraine sounds like a good idea

Brilliant William

300 BILLION dollars?! Ukraine might try to buy a Ford class carrier...

USA: we don’t steal 😂! Except when we dislike you

You digest things well. I would have liked for you to spend more time on the Ireland scenario. What countries fall where and what's their response likely to be?

As a Canadian, I feel I need to interject about our position on the "Spectrum of Dodginess". The place you set us clearly was "Peacetime Canada", as everyone knows "Wartime Canada" would make Vlad Tepes of Wallachia say "woah, chill."

NATO could’ve done this like way earlier but chose not to because if seizing does ever happen, the consequences would be devastating to financial stability, security and eventual downfall of US dollar. Beside the weapons can be replaced but what can’t replace is Ukrainian manpower and without manpower you are doomed even if you receive $1 trillion