A Banker’s View of the Ukraine Crisis

By Hon. Richard Holwill, JHCGA's Ambassador in Residence


In threatening an invasion of Ukraine, Russian President Vladimir Putin is acting on his long-standing distrust of the United States. A retired Russian diplomat now living in New York where he works for an international bank explained Putin’s thinking in a series of email exchanges the other evening.


Putin’s attitude, I’m told, is based on a reversal of policies established by George H.W. Bush in 1991. Bush articulated his policies on the fall of the Soviet Union in Kyiv, endorsing an idea being floated in Moscow to form a successor to the USSR called Commonwealth of Independent States (CIS). Bush went on to dismiss the Ukrainian independence movement, calling it “suicidal nationalism.” William Safire of the New York Times called this Bush’s “Chicken Kyiv speech.” Bush gave the speech on August 1, 1991. Three weeks later, 92 percent of Ukrainian citizens voted in favor of independence.


My contact insisted that Secretary of State James Baker reassured the last Soviet Foreign Minister, Eduard Shevardnadze, that the United States would respect Russia’s sphere of influence. The U.S. State Department denies that any such pledge was made. The subsequent expansion of NATO, which began under President Bill Clinton and continued under George W. Bush, prompted outrage and diplomatic protests from Moscow. While we might be inclined to treat this as ancient history, it is part of Putin’s obsession with restoring a defensive “march” between Russia and the West.


My contact does not believe that Putin will actually send troops into Ukraine. Putin, he wrote, “has other options that would be less dramatic and more practical.” Putin used unconventional forces to seize Crimea and dominate Ukraine’s eastern-most provinces. He could continue to do that and slice away the eastern-third of Ukraine with fewer problems and fewer objections from the West. He reminded me that “Russian is the mother tongue” of a majority of the population in the eastern third of Ukraine. He asked: “Why would Putin not continue with what has worked and try something new that comes with huge risks and very real costs?”


Putin, he said, remembers that the invasion of Afghanistan was a turning point in the political fortunes of the Soviet leadership. As thousands of young men came home in coffins, many mid-level officials began questioning the policies that dictated the defense of “socialism” everywhere it had been established. While Russians stoically accepted the losses in the “Great Patriotic War” (their term for World War II), losing young men for an ideology that could not deliver basic foodstuffs and consumer goods into Moscow’s stores convinced many that the time had come for change.


“If an invasion leads to the slaughter of our young men by our Slavic brothers, Putin will suffer.” While Putin may not care about public opinion, he is obliged to consider the consequences to his cronies and their wealth. As an international banker, my contact knows full well that President Biden has the power to bar Russia from using dollars in the international banking system.[i] The oligarchs form a constituency that Putin cannot afford to alienate. Clearly, they could be badly hurt by banking sanctions.


Young people in Russia enjoy their connection to the outside world. According to a poll cited in the Washington Post, they are the least likely to support Russian aggression in Ukraine and most likely to say that it will hurt Putin.[ii] Some of the sanctions proposed by President Biden would sever their ties to the Internet, Western entertainment sites, and even easy travel to the West,[iii] thereby, directly targeting this Russian demographic.


Based on this analysis, my contact concluded that Putin would seek a diplomatic resolution to this conflict. The United States cannot give in to his demands. The West will likely remain united, particularly because the countries on NATO’s eastern flank – those closest to Russia – will insist upon it.


Putin could try to orchestrate a coup in Kyiv but doing so will certainly cause a backlash and may not be sustainable. His best bet would be to do the obvious – negotiate with Volodymyr Zelensky, the President of Ukraine. Putin had previously refused to do so, calling Zelensky illegitimate and a U.S. puppet. Sill, Zelensky is the only one who can give Putin what he says he wants: A pledge to cooperate with Russia and not join NATO.


Richard Holwill

Wilson, Wyoming

January 31, 2022


[i] https://www.themoscowtimes.com/2022/01/20/biden-threatens-dollar-ban-on-russian-banks-a76093 [ii] https://www.washingtonpost.com/opinions/2022/01/25/fight-ahead-ukraine-body-bags-cyberwar/ [iii] https://www.washingtonpost.com/national-security/2022/01/23/russia-ukraine-sanctions-export-controls/


Follow Us
  • LinkedIn Social Icon
  • Facebook Basic Square
  • Twitter Basic Square