economy
Russia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding—and it may start seizing recruits for the military too
A financial crisis that has long been predicted by Russia experts and Kremlin insiders appears to have finally arrived as banks see depositors scramble to pull out their money amid fears it may be seized.
TL;DR
- Russians withdrew $3.4 billion from banks in the first half of August, following substantial withdrawals in previous months.
- The bank run is on track to nearly double the pace seen in 2022, reflecting concerns over financial stability.
- Russia's budget deficit is widening, its sovereign wealth fund is nearly depleted, and tax hikes are straining consumers.
- The finance ministry is considering legislation to access $40 billion in pension savings and oligarchs have seen assets nationalized.
- Warnings about a potential debt crisis and banking crisis have been building for months, exacerbated by high interest rates and deteriorating loans.
- The military is reportedly preparing for a wider mobilization, with authorities already using coercive tactics to find troops.
- A previous mobilization in September 2022 led to a mass exodus of men fleeing the country.