UK Regulator Issues Rare Bank Info Request on Ukraine and Russia Exposure

Britain's Prudential Regulation Authority sent a rare information request to banks over their exposure to the Ukraine and Russian markets in the immediate aftermath of deposed Ukrainian president Viktor Yanukovych fleeing the country.

The PRA, which is part of the Bank of England, confirmed to IBTimes UK that it sent the risk assessment request on the week of 3 March.

A BoE spokesperson said "you'll be aware of the developing and ongoing situation in the Ukraine and Russia – we asked them to consider the implications for their business and report those to us."

During the last week of February, ousted Ukrainian President Yanukovich fled the country, hours after opposition groups vowed to march on the president's office with deadly weapons, despite an interim truce.

On the same day, arch-rival Yulia Tymoshenko was released from prison.

The PRA request followed a few days later, as first reported by Risk magazine.

According to the Bank for International Settlements, foreign banks have a total of €133bn (£111bn, $184.5bn) outstanding exposure to Russia and €10.7bn of exposure to Ukraine.

The Ukraine crisis has heated up as Russian President Vladimir Putin has signed a decree recognising the Republic of Crimea as an "independent and sovereign state" ignoring stern warnings from the western world.

The Kremlin said that, taking into account the latest referendum in Crimea, the decree will come into immediate effect.

A brief statement posted on the Kremlin's website read: "Given the declaration of will by the Crimean people in a nationwide referendum held on March 16, 2014, the Russian Federation is to recognise the Republic of Crimea as a sovereign and independent state, whose city of Sevastopol has a special status."

Putin's announcement comes hours after the US and the EU imposed sanctions on Ukrainian and Russian officials, which were followed by a warning from President Barack Obama that more such clampdowns will come if Russia's fails to stop its interference in Ukraine.