I'm going to start off by applauding Barack Obama.
"But, Peter," I hear some of you saying, "you don't like Obama." Doesn't matter. Honor and integrity dictate that I applaud someone when they do right. And Obama just did something pretty fucking awesome.
He hit Mother Russia right where it hurts the worst.
So, the Russian invasion of Crimea has got everyone screaming bloody murder. Obama was threatening sanctions. No doubt, Putin wasn't afraid. He can swing the UN when he needs to.
Obama didn't use the UN. He used his executive powers. If you are wondering how the pen is mightier than the sword, pay attention, this is good.
Among Russia's banks is the Bank Rossiya. It isn't the largest bank in Russia, but it is the most important. It supplies financing for Russia's energy sector, which is its biggest industry (gas, oil, coal, etc.). It does this because it boasts as clients the Ozero Dacha Cooperative, a private community for members of Putin's inner circle. In other words, it's a bunch of oligarchs with their own private little bank.
Well, Obama's move to punish Russia was to add Bank Rossiya and 20 members of Putin's inner circle to the Office of Foreign Asset Control's list of "specially designated nationals." This means that American banks are forbidden to do business with them.
1) Banks check to see if they have any accounts with Bank Rossiya or the 20 people. If they do, those accounts are frozen and made unusable.
2) Banks check to see if any of their associates are still dealing with Bank Rossiya or the 20, and if they are, they make sure no transactions involving BR or the 20 go through their own systems. Any such transactions with a whiff of them are blocked.
Because America is the capital of the business world, this means every bank with US connections (which means every international bank) will not honor a transaction with BR or the 20.
Obama just kicked Russia's elite upper class out of the international financial market, as well as the gas and oil companies that arrange their financing through BR.
Oh, yeah. That hurts.
Russia retaliated by saying they would block certain US businessmen from their banks. Those named went on Twitter to brag how they'd been banned by Russia, and one went so far as to say he was going to have to cancel his vacation in Siberia. Hey, Russia! You're doing it wrong!
So, good one, President Obama. I hope this works out well.