Across the world, governments are weaponising economic policy in ways once considered unthinkable. From the West’s freeze of Russian reserves to China’s ejection of tech giants and the forced exits of Western firms in Russia, a new era of “regulatory takings” is reshaping global finance. As legal protections erode, investors face a landscape where political power, not contracts, increasingly determines outcomes.
As the Russian “special operation” in Ukraine began in February 2022, few would have anticipated that this would affect the fundamentals of global finance. The G7 and EU froze roughly €210 billion of Russia’s central bank reserves and assets. In May 2024, the EU decided to channel the interest income from Russian central bank reserves to Ukraine, while the G7 floated a larger ‘repatriation loan’ to Kyiv securitised against those assets. Central bank reserves, once accorded the highest threshold of neutrality, were now being treated as seized yachts and blocked oligarch accounts: assets whose fate turns on politics, not on law alone. Since the Second World War, this scale of central bank asset freezes is unprecedented; asset freezes have been limited to relatively small economies such as Cambodia, Iran, Libya, and Afghanistan.