Euroclear faces geopolitical storm over frozen Russian assets and Ukraine financing

In a grey office block near Brussels’ Gare du Nord, a little‑known institution has been thrust into an extraordinary geopolitical spotlight. According to the Financial Times, Euroclear, the central securities depository that quietly settles cross‑border trades and acts as custodian for €42.5tn of assets, now holds the bulk of Europe’s frozen Russian funds and finds itself at the centre of a fraught debate over how, if at all, those assets should be used to help finance Ukraine.

Euroclear and its Luxembourg rival Clearstream perform deeply technical, ostensibly apolitical functions: they record ownership of securities, settle trades and pay coupons and redemptions. The FT reports that Euroclear handles transactions worth more than €1,100tn a year and that, since western sanctions after Russia’s full‑scale invasion of Ukraine in 2022, a very large slice of Russia’s European‑based assets has been immobilised. European official figures and press reports have put the total of immobilised Russian assets in the EU at about €210bn, with Euroclear holding roughly €193bn of that sum; the FT used a slightly lower rounded figure, saying €185bn was frozen at Euroclear. According to the FT, €193bn of immobilised assets sits on Euroclear’s balance sheet and by the end of September that balance sheet had swelled from a pre‑war average of about €30bn to about €227bn.

The sudden prominence has exposed the operational, legal and reputational strains on providers of market infrastructure that were designed to remain aloof from politics. “At the moment when the sanctions were decided, we immediately knew that that was going to be very impactful,” Lieve Mostrey, former chief executive of Euroclear, told the Financial Times. “We realised very, very quickly what would be the size of the challenge.” Euroclear has hired about 200 additional staff to manage the frozen portfolio, tightened security and says its director general, Valérie Urbain, received threats that required extra protection. “Initially, Euroclear was not known by the policymakers in the European institutions,” Urbain told the FT in July. She added the firm had previously been “very, very far away” from politicians’ attention.

The EU’s consideration of a mechanism that would have allowed immobilised Russian central bank assets to back a €90bn two‑year “reparations loan” to Ukraine forced market infrastructure into the political foreground. According to FT reporting, the plan , which would have been an unprecedented departure from Euroclear’s neutral custodial role , collapsed when EU leaders failed to agree the unconditional guarantees Belgium demanded to protect Euroclear’s liquidity and shield it from legal risk. Belgium’s reluctance was reported by Le Monde, which said Prime Minister Bart De Wever warned that unfreezing or using the assets without full guarantees could leave Belgium exposed to restitution claims and other liabilities.

The political manoeuvring has not been the only consequence. Rating agency Fitch put Euroclear on notice of a possible downgrade in December over liquidity concerns linked to proposals to repurpose frozen assets, the FT reported. Critics warn that repurposing assets held by a neutral depository could prompt countries and major institutions to seek alternatives and thereby fragment global post‑trade infrastructure. “Countries like China, Russia, could say we never want to be in that position where we are being put under pressure because our sovereign assets are being seized or being used,” one participant in the discussions told the FT.

Euroclear’s handling of the immobilised funds has also been financially significant. The company says it has reinvested cash on its balance sheet in short‑term markets; the FT reported “interest income” related to Russian assets of €3.8bn in the first three quarters of 2025, and a net profit of €232mn from the Russian portfolio in the first nine months of 2025 , more than a quarter of Euroclear’s overall profits of €882mn. The FT said a large part of those returns is being channelled to support a $50bn G7 loan to Ukraine, but the profitable use of immobilised assets has fuelled legal and political controversy.

Legal pushback has followed. The Russian central bank has filed a lawsuit in Moscow seeking damages from Euroclear for being barred from managing and accessing its funds, according to reporting by The Guardian and the Associated Press. Le Monde quoted Euroclear’s leadership warning that any step resembling confiscation would “breach international law” and imperil the institution’s legal obligations and credibility. The Russian state has also begun seizing western assets in retaliation, adding operational headaches to the legal exposure.

European institutions moved to clarify custodians’ responsibilities last year. On 12 December 2024 the Council of the European Union adopted a decision and regulation setting out the obligations of central securities depositories holding immobilised assets and the legal status of revenues they generate, Euronews reported. The measure barred transactions related to the management of Central Bank of Russia reserves that had been immobilised under EU sanctions and sought to define how extraordinary revenues would be treated.

The contrast between Euroclear and Clearstream has been notable. The FT and other reporting describe Clearstream , part of Deutsche Börse , as having reduced its exposure to Russia after 2014 and holding far smaller amounts of Russian sovereign assets, keeping it largely on the sidelines of the debate. Euroclear, by contrast, deepened its links with Russia in the decade before 2022 and thus now holds the largest share of immobilised assets in Europe.

Policy‑makers face a dilemma. Keeping assets immobilised indefinitely, a decision confirmed by European Council president António Costa in December, ensures they cannot be used by Moscow but leaves the question of compensation and legal risk unresolved. Using the assets to finance Ukraine would mark a striking innovation in sanctions policy but risks legal challenge, political fragmentation and attrition of trust in Europe’s financial plumbing.

Industry observers and think‑tanks cited by the FT and Le Monde warn of long‑term consequences. Nicolas Véron of Bruegel said Euroclear “understood from day one of the sanctions that they wouldn’t be able to hide it.” The threat of legal actions, shifting ratings and strained relations with sovereign clients has transformed an institution once content to operate in “complete quietude”, in the words of former FT journalist Peter Norman, into a central actor in one of Europe’s most sensitive geopolitical and legal dilemmas.

As EU capitals weigh guarantees, legal immunities and the terms on which immobilised assets might ever be mobilised, Euroclear’s predicament illustrates how sanctions can push the underpinnings of global finance into the arena of geopolitics. The future of the frozen assets , and of the firms charged with holding them , will be decided not just in boardrooms but in courts, cabinets and the corridors of European institutions.