A pandora's box has been opened.
In the short term, the move is a significant hit to the viability of the Russian financial system. Longer term, it “opens a whole Pandora’s box” that might accelerate the development of a global financial architecture that is at arm’s length from the West’s ability to disrupt it, Mr. Kapoor said.
There are only a handful of precedents, all targeting much smaller and less connected economies than Russia’s, including Iran, Venezuela and North Korea.
“Normally, without a United Nations Security Council resolution, it’s hard to justify things like this under international law and the principle of sovereign immunity,” Mr. Kapoor said.
The big unknown is China. If Beijing chooses to support Russia, that would substantially diminish the impact of the sanctions, given the scale of China’s foreign reserves and banking sector.