LSE boss David Schwimmer said the exchange had decided against immediate action to allow institutional investors time to exit their positions. It also doesn’t go far enough – a permanent expulsion of Russian stocks would have shown the country’s elite that one of the world’s preeminent financial centres was prepared to use maximum force.
Nevertheless, a suspension still sends a powerful message that the western financial system is rapidly closing to Moscow and anyone with links to the Kremlin.
Ditto the ejection of Russia’s aviation and aerospace industries from London’s insurance markets. With Russian planes banned from European and UK airspace, this latest move could ground many airlines indefinitely.
There are concerns that action against Russia risks being too indiscriminate, that the West punishes Putin for breaking the law by breaking the law and that even those that are said to be “close to the Kremlin” aren’t really that close to the Kremlin.
I’m with the hardliners like Bryant, who argues that “anything that is directly, indirectly, tangentially or slightly connected with the Russian state regime should be rooted out of British political, economic and cultural life”.
His uncompromising stance is echoed by financier Bill Browder, a man who has done more to help root out Russia state corruption than anyone else in the West, and whose lawyer Sergei Magnitsky paid with this life when giving evidence against Russian officials involved in fraud.
Browder has called for “total isolation of the Russian government, Russian oligarchs and Russian companies until Russia withdraws from Ukraine.”
The spotlight then must now turn to the people he has labelled the “enablers” of the Russian oligarchy. These are the lawyers, the lobbyists, the accountants, the spinners, and the shadowy fixers – a grubby industry that has been content to provide a veneer of legitimacy to Putin’s pals, polishing the reputation of the kleptocrats and often, helping to hide their wealth.
Anti-corruption campaigner Transparency International has identified nearly 600 firms and individuals offering the full gambit of services to those with suspicious wealth. Every one of them must now choose a side. If they don’t, then sanction them too.
The action of the LSE and Lloyd’s of London shows unequivocally that the City is now full bore behind the economic war on Russia, which means making a decision about where you stand. Maintaining ties with the regime, however indirectly, will be interpreted as siding with Putin’s barbaric war while undermining the West in its support of Ukraine. There are no shades of grey.
It’s not an easy decision to make. The LSE has been trying to cosy up to Russia since the 1990s. Indeed, as recently as September, TheCityUK lobby group was encouraging British companies to deepen ties with Russia, along with China and Saudi Arabia, in a sort-of updated version of George Bush’s famous Axis of Evil.
But relationships are being junked overnight as BP, Shell and others have emphatically demonstrated. If giant multi-nationals, as well as a pillar of Britain’s financial district can turn their back on the world’s number one pariah state, then so can some grotty London law firm or low-rate PR outfit.
