{"id":5860,"date":"2026-08-23T23:45:36","date_gmt":"2026-08-23T23:45:36","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5860"},"modified":"2026-08-23T23:45:36","modified_gmt":"2026-08-23T23:45:36","slug":"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","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5860","title":{"rendered":"Russia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding\u2014and it may start seizing recruits for the military too"},"content":{"rendered":"
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In the first half of August, Russians withdrew $3.4 billion (286.4 billion rubles), according to central bank data cited by the Washington Post<\/em>. That\u2019s after $7.3 billion was withdrawn in July and $4.5 billion in June.<\/p>\n

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\u201cDrones are flying. Things are burning down. Nervousness is growing. And people\u2019s everyday wisdom may be kicking in that they need to have cash under their pillow and not somewhere in banks where it may never be returned,\u201d a former finance official told the Post<\/em>, adding that banks have much of their capital tied in loans elsewhere.<\/p>\n

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The situation echoes the iconic scene from the movie It\u2019s a Wonderful Life<\/em>, when panicked depositors show up at the Bailey Bros. Building & Loan demanding their cash, only to learn that it\u2019s not all there.<\/p>\n

The bank run in Russia may not be as dramatic or precipitous. But the stampede out of lenders this year is on track to nearly double the $24.7 billion pace that was seen in 2022, when Vladimir Putin launched his invasion of Ukraine.<\/p>\n

Back then, Russia was flush with cash and expected to pay for a short war. But more than four years later, the invasion has turned into a quagmire that has crushed the Kremlin\u2019s finances.<\/p>\n

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The budget is sinking into deeper deficits, the sovereign wealth fund has been nearly depleted, and tax hikes are straining consumers who are already struggling with high inflation.<\/p>\n

Moscow has directed banks to offer capital to the defense industry, but many of those loans turned into bad debts. Now, the financial sector\u2019s loss of deposits has created a liquidity crunch so severe that it\u2019s threatening Russia\u2019s ability to fund its war.<\/p>\n

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Taras Skvortsov, a senior executive at top retail lender Sberbank, told Russian radio that many banks don\u2019t have cash on hand to buy government bonds.<\/p>\n

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In fact, the finance ministry halted bond auctions indefinitely last month amid higher borrowing costs and weak investor demand. The auctions are the Kremlin\u2019s main source of domestic borrowing to fill its budget deficit, which hit $76 billion at the end of July.<\/p>\n

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As the government\u2019s sources of funding dry up, ordinary Russians fear their money may be next. The leader of Russia\u2019s Communist Party told parliament recently that 130 trillion rubles held in bank accounts should be \u201cmobilized\u201d to address the country\u2019s economic and budget woes.<\/p>\n

Meanwhile, the finance ministry is preparing legislation that could let it gain access to $40 billion in pension savings held in privately managed funds. <\/p>\n

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That\u2019s after Russian oligarchs have seen their businesses nationalized, with $51.5 billion in assets seized for the state last year.<\/p>\n

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\u201cIf the government needs cash, Putin will just do a grab for assets. He doesn\u2019t care,\u201d an associate of a Russian billionaire told the Post<\/em>. \u201cAnd that\u2019s where I think it\u2019s heading.\u201d<\/p>\n

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Warnings about Russia\u2019s finances have been building for months. In June 2025, Russian banks raised red flags on a\u00a0potential debt crisis\u00a0as high interest rates weighed on borrowers\u2019 ability to pay off loans. Also that month, the head of the Russian Union of Industrialists and Entrepreneurs warned many companies were in \u201ca pre-default situation.\u201d<\/p>\n

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The Center for Macroeconomic Analysis and Short-Term Forecasting, a state-backed Russian think tank, said in December the country could face a banking crisis by October if loan troubles worsen and depositors pull out their funds.<\/p>\n

Earlier this year, Russian officials told Putin that a\u00a0financial crisis could hit by the summer\u00a0amid spiraling inflation.\u00a0<\/p>\n

In May, sources told the Russian newspaper\u00a0Izvestia<\/em>\u00a0that nearly\u00a025% of the bond market is now at risk of default\u00a0as businesses that borrowed at low rates must refinance at much higher ones.\u00a0The volume of debt that needs to be rolled over this year is about double from last year, adding pressure on cash flows and raising competition for liquidity.<\/p>\n

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And according to a European intelligence report this past June,\u00a0Russian lenders are vulnerable due to soaring indebtedness and deteriorating loans. It said\u00a0the number of Russians who declared bankruptcy last year jumped by almost a third to more than 500,000. <\/p>\n

\u201cThe situation creates the illusion of a dynamic economy \u2060that, in reality, conceals an explosive situation which an economic shock, such as an ambitious package of sanctions against banks \u2026 could trigger,\u201d the report added, according to Reuters.<\/p>\n

The worsening state of Russia\u2019s financial sector mirrors its performance on the battlefield. New Ukrainian tactics and drones have halted Russia\u2019s advance, decimated the country\u2019s oil infrastructure, and pushed casualties above the replacement rate.<\/p>\n

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And just like Russia\u2019s search for money to seize, reports indicate the military is preparing to ramp up the number of men it seizes to fill the ranks.<\/p>\n

Authorities have already been\u00a0using coercive tactics to find fresh troops. Now, sources told the Wall Street Journal<\/em> that the military is preparing plans and procedures for a wider mobilization.<\/p>\n

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But because of an expected political backlash, the Kremlin may wait until after parliamentary elections next month to announce it. <\/p>\n

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An earlier mobilization in September 2022 set off a mass exodus of hundreds of thousands of men, who fled to neighboring countries like Georgia and Kazakhstan.<\/p>\n

Rumors of a new one have already sent cross-border traffic soaring. In addition, property prices have jumped recently in Georgia and Armenia in anticipation of another exodus, real estate agents told the Journal<\/em>.<\/p>\n

Read more Trump panic mounts as judge rules his financial records fair game in his own BBC defamation lawsuit<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The financial sector’s loss of deposits has created a liquidity crunch so severe that it’s threatening Russia’s ability to fund its war.<\/p>\n","protected":false},"author":1,"featured_media":5859,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-5860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-russia"],"yoast_head":"\nRussia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding\u2014and it may start seizing recruits for the military too - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=5860\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Russia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding\u2014and it may start seizing recruits for the military too - 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