May considers banning City of London from selling Russian debt

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Theresa May has agreed to look into imposing a ban on the City of London from helping Russia to sell its sovereign debt, which prop ups the Russian economy.

Last month, City clearing houses, working alongside a major sanctioned Russian bank, helped issue $4bn (£2.83bn) of eurobonds to finance Russian sovereign debt, of which nearly half was sold in London markets. Nearly half the debt was bought by London-based investors, predominantly institutional investors.

A loophole in EU and UK legislation has allowed sanctioned Russian banks, primarily VTB bank, to act as the main organisers – known as book runners – for the issuance of Russian debt.

A public call for the loophole to be closed has been made three times in the past week by the foreign affairs select committee chairman, Tom Tugendhat.

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