Goldman Sachs has become the first major Wall Street financial firm to cut ties with Russia following the country’s invasion of Ukraine.
“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” the bank said in a statement.
Rather than immediately exiting the country, Goldman Sachs will wind down their operations. A source also said that this departure would be insignificant to the company’s finances.
More and more Western organizations are ceasing their operations in Russia, putting pressure on banking firms to consider following suit. According to the Bank of International Settlements, European banks are expected to experience the bulk of exposure to Russia, but US banks will also face exposure totaling $14.7 billion.
Goldman Sachs reported a $650 million credit exposure to Russia recently.
However, Citigroup is the US bank that faces the highest exposure. This week, the financial firm said it would be limiting its Russian consumer operations and will divest the franchise.
According to Cornell Law School Professor Dan Awrey, banks “can’t just unilaterally walk away from lending commitments and other types of financial claims” because “there’s somebody on the other side and that will make it much more complicated.”