Part 5/12:
Should the Central Bank implement restrictions on bank withdrawals rather than an outright freeze, this would still spell disaster for public trust in the banking system. Citizens could find themselves unable to access their savings, leading to a prolonged economic crisis. Historical precedents, like those from Lebanon, illustrate the detrimental effects of capital controls on the public’s perception of financial institutions.
The move could create an environment characterized by lower trust in the banking system, a decrease in bank deposits necessary for loans, and a shift toward unregulated black market lenders. Ultimately, the Russian economy may find itself operating in a shadowy environment lacking transparency, making economic recovery even more challenging.