this post was submitted on 18 Jan 2024
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President Zelensky has called for some of the Russian billions seized by world banks to be sent to rebuild Ukraine.

The G7 group is considering taking only the rise in value and interest due since the assets were frozen in 2020.

But the Ukrainian president told the BBC all of the money should be used. "If the world has $300bn - why not use it?", he said.

The BBC understands central bankers in Europe have concerns over undermining banks' safe haven status.

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[–] LufyCZ@lemmy.world 5 points 10 months ago (1 children)

Do you know that "people holding those seized assets" is actually "people looking at frozen assets with their hands tied behind their backs"?

[–] ysjet@lemmy.world 12 points 10 months ago* (last edited 10 months ago) (1 children)

No? That's literally how banks work. You store your money there, and they protect it, manage it, etc. But this isn't harry potter, there isn't some underground vault with your name on it, they just take all your money and stick it in a giant pool they use to invest and make themselves money.

'Your' money is actually just them tracking what you actually have, and if you ask for some of it, they have the equivalent of petty cash they pay it out with. You cannot pull out massive amounts of your own money all at once without warning on the spot, because they simply will not have it available.

It's why depressions and 'bank runs' are a thing- the actual amount of cash a bank has on available is ALWAYS lower than the total number of assets they have earmarked from people, because it's all tied up in investments. If those investments go belly up, or everyone all tries to pull money out at the same, the bank has a major problem.

"Freezing" someone's assets just means that the bank isn't allowed to let someone pull money out, or transfer that money, not that the cash/investments/etc are pulled back and stuck in a vault somewhere- the BANK still has that money it's larger money pool, because it was always there from the first moment they got it.

[–] LufyCZ@lemmy.world 2 points 10 months ago

There are many banks that do not do that - Mellon for example.

But yeah, you're right, for some reason I imagined them just taking the money out and chilling on a yacht somewhere with it