The British government announced a package of sanctions today, the most important of which was the freezing of all Russian bank assets held in London.
This is a big deal - the only reason these Russian banks have subsidiaries in London, is because London is where global commodities are traded. If you want to sell your oil, copper, titanium or whatever, you need to do it on the London Commodities Exchange, and you need your banks in London, so that when the contract is settled, you can receive your funds.
Now that the Russian banks have been frozen, if their customers wish to continue doing business in London, they need to open an account with another bank - but those banks may decide not to take on Russian customers out of prudence.
The Wall Street Journal is reporting that oil traders are already avoiding Russian crude for fear of being caught up in sanctions.
The United States will announce it's sanctions tomorrow, and they will affect Russian business in different ways.
Russia will try to offset this by trading exclusively with China. The billion-dollar question: Is the Chinese economy big enough to shield Russia?
