A huge shock is coming for European banks – Russia “hands out” lawsuits over Russian assets

The European banking sector is expected to face a massive shock.
Russia has announced lawsuits against European banks over their efforts to use frozen Russian assets to finance Ukraine.
In a brief statement, the Bank of Russia warned it would take legal action to “recover damages from European banks in a Russian arbitration court,” demanding compensation equal to “the value of unlawfully withheld assets and lost profits.”
Leaders of the European Union are currently holding discussions to reach consensus on the use of Russian assets, as several members, notably Belgium and Hungary, oppose such a move.

On January 16, the hearing for the lawsuit against Euroclear

On January 16, a hearing will take place in a Moscow court for the lawsuit filed by the Russian central bank against Euroclear, which holds most of the Russian assets frozen in Europe following Russia’s invasion of Ukraine in 2022.
The Central Bank of Russia has filed a claim seeking $230 billion in compensation from Euroclear, marking the first step in what the Kremlin has warned will be a legal nightmare for the EU over its plans to use frozen Russian assets to support Ukraine.
The EU, seeking ways to finance Ukraine’s defense and fiscal needs for 2026 and 2027, plans to use up to €165 billion in Russian central bank assets frozen in Europe.
Euroclear, Belgium’s central securities depository, has held bonds on behalf of the Russian central bank since the start of Russia’s invasion of Ukraine. Those bonds have since matured, but the funds remain with Euroclear due to EU sanctions against the Kremlin.

The threat from Fitch

Meanwhile, Fitch has warned of a possible downgrade of Euroclear, placing it on “negative watch,” citing potential legal risks and liquidity issues stemming from the European Union’s plans to use frozen Russian assets for a compensation loan to Ukraine.
For its part, Euroclear said today (17/12/2025) that Fitch’s decision highlights the need for greater clarity and detail regarding the proposed compensation loan for Ukraine and that it is preparing for a range of scenarios. “With the right comprehensive safeguards, we are confident that the significant risks to Euroclear will be appropriately addressed both in the short and the long term,” a Euroclear spokesperson said.
Fitch warned that insufficient legal and liquidity protection for such a scheme could create a balance-sheet mismatch for Euroclear if the liabilities of the Russian central bank become payable.
The agency said it will decide on Euroclear’s rating once there is sufficient clarity on the policymaking process and the implementation of the compensation loan, which could emerge at an EU summit on Thursday and Friday.
The move affects Euroclear Bank’s and Euroclear Holding’s long-term issuer default ratings at “AA,” short-term IDRs at “F1+,” viability ratings at “AA,” and debt ratings, according to Fitch.

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