“Look what your drunken friends have done now,” yelled Fitzwilliams pointing at the BBC news flash on one of the multiple screens in his office that provided him with a minute by minute account of market, business and world news.
Wreckage of Malaysian Airliner
Kennedy winced. Anything that went wrong in Russia, or China for that matter, was his fault. He had already received an Interfax news flash on his phone: the crash of a Malaysian jetliner in the Ukraine, just two days after the downing of a Ukrainian SU-25. If it turned out it had been hit by a pro-Russian rebel missile, as feared, then the consequences would be grave.
It would of course affect the bank’s business if sanctions were reinforced. Since the first hint of trouble the previous October, when Victor Yanukovych, the ousted Ukrainian president had rejected EU overtures by signing a trade agreement with Russian, INI London had been reducing its engagements in Russian markets.
To Fitzwilliams regret, the bank had considerable investments in Russia, but most of its loans were through banking pools where its exposure was reduced. In any event these were insured. The real pain meant, apart from a catastrophic change in international relations, the disappearance of rich commissions on future business if Russia became a pariah state, which until this latest disaster had seemed a fairly distant threat.
Tough new sanctions would inevitably hit Putin’s inner circle, which could in turn would affect Sergei Tarasov, Fitzwilliams’ business partner, who like others of his class hoped Putin would tone down his belligerent rhetoric and seek a more accommodating partnership with the West.
Already, London based oligarchs were keeping their heads down, fearing for their business and Putin’s wrath if it was suspected their loyalty to Mother Russia was in any doubt.
The Obama administration reacted by announcing an intensification of sanction against Russia, sending Michael Fitzwilliams into a panic. Stocks had already dropped on the Moscow exchange with the rouble coming under acute pressure following Moscow’s failure to end the fighting in Ukraine.
The MICEX index fell over four percent as a disastrous week was made worst with the announcement Russia’s oil giant Rosneft, along with Gazprombank OAO, the country’s third-largest bank, would be barred from US capital markets.