Bank to the world, arm of the state: US sanctions against Russia and the Federal Reserve

Abstract The Federal Reserve has participated in the US government’s Russia sanctions regime by freezing and seizing Russian central bank assets after the 2022 invasion of Ukraine. Traditionally, such assets have been immune from seizure under US and international law. This article considers the costs of the Federal Reserve’s role in this policy change, even if the benefits outweigh those costs. The shift exemplifies the American turn towards financial warfare as a foreign policy tool, unsettles established norms of international law, and pressures the principle of central bank independence. Whatever the near-term benefits, including the Fed in the sanctions regime may carry long-term costs for US financial leadership.