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Reporting the Financial Fallout of the Ukraine War

By Lee Barney

On Feb. 24, 2022, when Russia, without provocation, invaded Ukraine, financial journalists found themselves in the unusual position of having to report on war and economic sanctions being imposed by the West on Russia,

The task was unexpected for New York Financial Writers Association (NYFWA) members, but it has been a challenge they have lived up to.

This was the message from speakers at a NYFWA webinar March 22, featuring high-profile journalists from Bloomberg, The New York Times, ThomsonReuters and The Wall Street Journal.

With Russia President Vladimir Putin’s goal of reannexing former reaches of the USSR, NYFWA journalists were quick to come up to speed on Russia, WWI, WWII and sanctions. It was, said Patricia Cohen, the London-based global economics correspondent for The New York Times, like taking a ”crash course on institutions, policies and practices I have never heard of before, such as SWIFT [the Society for Worldwide Interbank Financial Telecommunications],” as well as to ask a plethora of questions, such as, “What does it mean when a central bank finds its assets frozen?”

To be able to come up to speed on history, geopolitical facts and financial details heretofore not covered, under deadline “right, the first time—that is a lot of pressure,” Cohen said.

Howard Schneider, a U.S. Federal Reserve reporter in the Washington, D.C., bureau of ThomsonReuters, concurred, saying the Ukraine war prompted him to expand his coverage to commodities. That meant covering not just the oil and gas industry, i.e. Russia’s No. 1 export, but a variety of other commodities, such as wheat and corn, vital exports for Ukraine.

While important, speakers said, reporting on economic sanctions is nothing in comparison to the work of the brave journalists on the ground in Russia and Ukraine covering the war, Schneider said.

Since the West’s response to Russia’s invasion of Ukraine had been, as of the March 22 webinar, principally economic sanctions, the NYWFA speakers spent a considerable amount of time discussing whether or not the sanctions will, in fact, convince Russia President Vladimir Putin to stop the aggression and to reconsider his threat of the use of nuclear arsenal.

One of the key questions to explore with regards to the sanctions is their effects of the capital markets and individual companies as Russian oligarchs move their money, Schneider said.

Stephanie Baker, a senior writer for and Bloomberg Businessweek, who lived in Russia in the 1990s and interviewed oligarchs, said she is skeptical as to how effective the sanctions will be, even though they have extended to the SWIFT and Russia’s central bank. Oligarchs whose cash has been frozen and who are unwelcome in countries outside of Russia may have no other option but to return to Russia, right back into Putin’s inner circle, Cohen said—the opposite intention of the sanctions.

Moderator Lawrence Carrel, a financial journalist and a member of the New York Financial Writers Association Board of Governors, asked speakers what story about the war they have written that they are most proud of. “We understand this to be an inflection point in history,” Carrel said.

Cohen said that when the was broke, she went to Romania near the Ukraine border to interview refugees and that it is this type of one-on-one, boots-on-the-ground reporting that she enjoys the most.

Federal Reserve reporter Schneider said the war has thrown central banks poised a “curveball” for their monetary policies, particularly the U.S. Federal Reserve and the 10-year Treasury bond safe haven. “Macro aggregates reflected in the yield curve are a problem for the Fed,” Schneider said.

Baker said the Ukraine war is a challenge for financial journalists and mainstream business reporters “not trained to cover wars” and who now find themselves in “incredibly difficult circumstances,” particularly with respect to writing about “sanctions, the principle tool being used by the West to discourage Putin from waging war, because they do not want to engage in a conventional war with a superpower with nuclear weapons,” Baker said.

Ian Tally, a Wall Street Journal writer who covers sanctions, terror finance and other illicit financial networks from the paper’s Washington, D.C., bureau, said writing authoritatively about the sanctions is important, particularly “how the European Union and the U.S. cut Russia off from the global economy, and to write about the key movers and shakers” in that effort.

The flood of sanctions that the West has imposed on Russia almost immediately after its invasion of Ukraine has been a “highly intense, nonstop environment,” Talley said.

The fact that the sanctions may not succeed in getting Putin to stop his aggression on Ukraine and, possibly, Poland and other Eastern European nations, is only one difficult outcome Baker said she has covered. On top of this inconvenient truth, the sanctions are further complicating the world’s food and manufacturing supplies and may, in fact, add to inflation in the U.S. and to world hunger, Baker said.

“The Russian economy has taken a huge hit with the freezing of the Russia Central Bank reserves,” Baker said. “The problem with sanctions is that they take a long time to have any real effect, and the West has allowed Russia to continue to export oil and gas.”

However, judging from one interview that Baker recently did with an oligarch, Putin and the Kremlin were not prepared for the extent to which the United State and NATO nations imposed their sanctions, she said. The oligarch was not prepared for the West’s unanimous condemnation of the war and the economic sanctions, for he had not “parked his cash” outside of Russia and has been effectively cut off from his money, Baker said.

Russia is also highly dependent on technology and machine parts from the West in order to do “high temperature drilling” for oil, Talley said.

And, as proven by the death of seven Russian generals in Ukraine, Russia’s communications technology is rudimentary, Talley added.

He said he is hopeful that the sanctions will succeed in “defunding the Kremlin’s power and all of the workings of the KGB,” especially paired with the “collective political pressure that is building and the message that sends to the world as China flexes its muscle” with its own threats to invade Taiwan.

Reporting accurately on the war and Putin’s atrocious targeting of civilians is critically important, the speakers said, particularly as there are “harrowing” reports of Russian soldiers specifically targeting the press covering the war, Cohen said.

Finally, the speakers said, they have been able to report on the economic sanctions by obtaining critical data from banks and other financial institutions.

“The institutions that are involved in the transactions between the U.S., EU and Russia have a good eye and are collecting what they are seeing,” Talley said. “There are always ways that the data can come out, but the most difficult data to obtain is in Russia. I would love to see the emails between Putin, the central bank, Moscow and St. Petersburg.”

Putin himself may not care about how the sanctions are hurting Russians, Talley said, but they are going to make millions of “pensioners choose between buying milk or bread.

“Forming an accurate picture both on the ground and at the 30,000-foot level is difficult but possible,” Talley said.

As to Carrel’s final question about how a crippled Russian economy might impact the world’s financial markets, Talley said, “No one cares if Russia defaults, or thinks they will topple the world economy.”