The West should confiscate Russia’s foreign exchange reserves to help Ukraine while reducing the risk of US dollar dominance, says anti-Putin hedge fund manager.

  • Russian foreign exchange reserves should be confiscated and used to help Ukraine, Hermitage Capital CEO Bill Browder said in an interview with the FT.
  • To avoid weakening the dominance of the dollar, other countries must join the US, added a longtime critic of Vladimir Putin.
  • “It seems perfectly morally logical. It makes financial sense. That would be a simple answer to those who complain about the cost of this war.”

Russia’s central bank’s frozen foreign exchange reserves should be confiscated and used to bail out Ukraine, Hermitage Capital Management CEO Bill Browder said.

He has been a longtime opponent of Vladimir Putin and advocated for the Magnitsky Act, a 2012 US law named after a Russian whistleblower that authorizes sanctions against human rights violators.

And in an article published in the Financial Times on Thursday, he turned his attention to $300 billion, euros and other Russian reserve assets that were frozen last year after Putin launched a war with Ukraine.

While Russia no longer has access to that money, others don’t either. But Browder argued that these assets should be confiscated and used to protect and rebuild Ukraine.

“It seems perfectly morally logical. It makes financial sense. This would be an easy response to those who complain about the costs of this war,” he wrote, adding that collective action is needed.

If only the US were to confiscate Russian reserves, Browder said it would jeopardize the dollar’s dominance in global finance as countries switch to other currencies out of fear that the same could be done to their foreign exchange reserves.

To avoid this, he argued that other reserve currency countries should join the US, leaving investors with little alternative.

He also waived sovereign immunity — the concept that countries are protected from legal action in foreign courts — noting that Putin had already changed international norms by attacking a peaceful country.

He noted that the Russian invasion had caused at least $1 trillion in damage to Ukraine, and it was a perfectly reasonable suggestion to use Russian funds to rebuild it.

“I believe the UK, US, Canada, Japan, EU and Australia should unite around this simple and viable proposal,” Browder concluded. “It will go a long way, at least to start repairing the financial damage that Russia has caused with this horrific invasion of Ukraine.”

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