18 December 2018
The sanctions placed on Russia in 2014 continue to reduce business causing intenational banks and financial services to move to the UK and the EU for a more business friendly environment.
Morgan Stanley is to close its equities and foreign exchange trading desks in Moscow and relocate to London.
The Financial Times said that Morgan Stanley had taken the decision because a stagnant Russian economy and sanctions were continuing “to chip away at western investment banks’ business there”.
The report added, “The US bank will relocate its Russian trading businesses to London, eventually resulting in a halving of its Moscow banker staff to about 30. Some jobs would relocate to London and others would be cut.
“Western investment banks have cut back their Moscow operations drastically since 2014, when the US and EU sanctioned Russia over the Ukraine crisis and plunging oil prices prompted a recession. The promise of further US sanctions has seen business drop even more.”
The bank declined to comment on the report but said in a statement, “Morgan Stanley remains committed to Russia and will maintain our long-standing, on-the-ground presence in Moscow and ensure that our clients in Russia continue to benefit from the capabilities of the firm, in particular as it relates to investment banking and global capital markets.”
Bloomberg commented that Russian markets had been punished by increasing sanctions imposed by the US and European Union to punish the Kremlin since the 2014 annexation of Crimea from Ukraine.
“Morgan Stanley joins other foreign lenders that were once major players locally, including Deutsche Bank AG and Credit Suisse Group AG, that have pulled back in Moscow as the costs of operating became too steep for the potential rewards,” Bloomberg added.