In China, they hinted that the confiscation of reserves of the Russian Federation for Ukraine and named the consequences for the event
This is stated in the Global Times, which is often used to demonstrate the position of the Communist Party of China on international issues. The report states that some politicians in the West may consider that the confiscation of Russian assets can be used as a demonstration of Ukraine support and weapons against Russia, but those who really know the world financial system are aware that such a step will only lead to catastrophic results .
This can not only complicate the problems between Russia and Ukraine, as the publication indicates, it will also lead to grave consequences for the international financial system. The Central Bank of Russia has about $ 300 billion of frozen assets in the US and Europe, which generate billions of dollars annually in the form of interest payments. For example, some of the frozen assets of Russia in the West are government bonds.
If the event had seized these assets in the name of Ukraine's support, it would have a harm to its own obligations. Regardless of how the West justifies the confiscation of Russia's sovereign assets and makes the process legal, changing their laws and rules, it is really important how investors and countries that also buy this issue of US and EU debt perceive. Geopolitical risks can also lead to default of public debt in Western countries.
The interpretation of the Rules in the field of finance, according to the Global Times, can undermine the trust of investment in government bonds, such as US government debt, which was considered a safe area. Now it may no longer be regarded as protection before geopolitical challenges. Such a default can have consequences for world financial order, as countries outside the Western camp will not use the dollar and the euro for trade payments and avoid Western government bonds.