Russia's financial institutions are bearing much of the burden of the country's wartime economy. Against the backdrop of new EU sanctions, experts are warning of a potential "explosive banking crisis," according to an EU intelligence report, Reuters reports.
A two-page briefing document prepared for European officials on the state of Russia's banking sector highlights its vulnerability to further Western restrictions.
Russian banks have largely withstood the sanctions imposed after Russia's full-scale invasion of Ukraine in 2022. However, deteriorating loan quality and rising household debt are creating an "explosive" risk.
