Sanctions Against Russia: Three Things to Know

Sanctions Against Russia: Three Things to Know

April 25, 2014 3:54 pm (EST)

Sanctions Against Russia: Three Things to Know
Explainer Video

The Obama administration is poised to enact tougher sanctions in order to mitigate Russian aggression in Ukraine, says Robert Kahn, CFR’s Steven A. Tananbaum Senior Fellow for International Economics. He offers three things to know about the strategy behind sanctions and how they could affect the Russian economy:

More From Our Experts

    More From Our Experts
  • Risk of Russian ’Lehman Moment’: Russia’s integrated, highly leveraged, and opaque relationship to global financial markets means that sanctions could exploit a vulnerability to produce what Kahn calls a "Lehman moment: a sharp, rapid deleveraging of the sort that global markets saw after Lehman Brothers collapsed and AIG was bailed out in September 2008." The resulting lack of financing and trust could severely compromise Russian trade and investment capabilities, he adds. But Kahn notes that sanctions alone cannot mitigate the crisis; they must be supplemented with positive measures, such as financial support for Ukraine, to be effective, and the cost of sanctions must be weighed against the costs of inaction and the risk of protracted instability.

Top Stories on CFR

United States

Immigration and terrorism are indeed linked, but the issue is far more complex than some commentators suggest.


Ian Johnson, the Stephen A. Schwarzman senior fellow for China studies at CFR, sits down with James M. Lindsay to discuss how Chinese filmmakers, journalists, and artists are challenging the Chinese Communist Party’s version of history. 

Climate Change

For decades, U.S. homeowners have counted on property insurance to protect them from catastrophic loss if their homes are destroyed—and the U.S. economy has rested on the functionality of that model. But as this summer’s extreme weather broke records, private companies reduced their coverage. As climate disasters become more frequent, can home insurance hold up?