-- Neal Kimberley is an FX market analyst for Reuters. The
opinions expressed are his own --
By Neal Kimberley
LONDON, July 23 Sterling may have some room to
fall versus the Swiss franc if fear of tougher
sanctions sees Russian investors shift cash from Britain to
Russian investors, who have poured capital into Britain,
notably into its high-end real estate, will have noted British
Prime Minister David Cameron's call for new sanctions on Russia
in the wake of last week's downing of a Malaysian airliner over
The European Union said on Tuesday Russia could face harsher
sanctions that could inflict wider damage on its economy but
delayed action for a few days. Minister agreed to widen the list
of individuals targeted by asset freezes and visa bans.
Sterling was a beneficiary of capital inflows from Russia
earlier in the Ukraine crisis, with a significant part of the 6
billion pounds worth of liquid Russian capital exported in April
said to have ended up in Britain.
Any Russian who might consider they could inadvertently end
up on an EU sanctions list may take the hint and move capital
out of Britain and the wider EU while they can.
One destination for that money might be Switzerland, whose
approach toward Ukraine-related sanctions on Russia has been
solid but, so far, more nuanced.
While Switzerland said in March it would not
be "abused" by those wanting to circumvent Western sanctions
against Russia, it stopped short of adopting its own measures.
The Swiss government fleshed out its stance on April 2
stating that 33 individuals subject to personal sanctions by the
EU would not be allowed to use Switzerland to avoid those EU
But Switzerland, a global commodity trading and private
banking hub, is popular with Russia's wealthy elite and is
reluctant to take steps that could compromise its cherished
neutrality or damage closely-nurtured trade ties with Moscow.
Yet equally, the Swiss would surely fall into step with any
extended EU list of specifically sanctioned individuals, as
alluded to by Britain's Cameron, though only after the event.
The earliest any extended list will be released is Thursday.
Russian investors who might fear their names could be
included on such a list may take the rational decision to shift
liquid capital from British pounds into Swiss francs and
accounts while they still have the opportunity to do so.
(Editing by Nigel Stephenson and Gareth Jones)