Western sanctions against Russia are threatening deposit runs on Russian banks, plummeting the ruble, encouraging international investors to divest Russian assets, and opening the door to more long-term damage to the Russian economy. Russian President Vladimir Putin likely thought the West would be slow to react to his government's invasion of Ukraine and, if the West did respond, it would be mild because of Europe’s internal divisions and its heavy dependence on Russian energy. But less than a week after Russia launched its invasion, the United States, the United Kingdom, the European Union, Switzerland, Japan and others have begun taking coordinated action to freeze the assets of dozens of Russian individuals and entities and prevent Moscow from accessing its $630 billion pile of foreign exchange reserves, with a substantial portion being rendered illiquid. The sanctions are already causing economic disruptions in Russia and have the potential to harm the country’s...
