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(Bloomberg) -- As Moscow braces for a possible expansion of U.S. sanctions, the head of Russia’s second-biggest bank said any further restrictions on the nation’s lenders would be tantamount to “economic war.”

“I’m calling this economic war, because the purpose of this is to exert pressure on Russia, not only economically but politically as well,” Andrey Kostin, the head of state-owned VTB Group, said in a Bloomberg Television interview at the World Economic Forum in Davos, Switzerland. “I’m not so much concerned about personal sanctions, which would be the least evil” measure, he said.

Russia is awaiting a U.S. Treasury report due Jan. 29 that could serve as the basis for new measures targeting individuals and businesses. The report, which is expected to amount to a blacklist of Russia’s elite, is being drawn up in response to alleged meddling in the 2016 presidential elections. Russia denies it interfered.

Kostin, attending his 23rd WEF, said he plans to attend Donald Trump’s speech, where he hopes to hear the U.S. president moderate his anti-globalist position. Relations between Washington and Moscow are at their lowest point since the Cold War, with the countries at odds over Syria, Ukraine and even decades-old arms-control treaties.

New sanctions against banks would further undermine Russia’s relationship with the U.S., Kostin said.

Elite’s Anxiety

Being included on the list won’t automatically trigger the kind of penalties already imposed on dozens of Russian insiders and state companies over both the election issue and Ukraine. Even so, the prospect of being named on the blacklist has caused anxiety among the Russian elite and led to a flurry of activity as some attempt to avoid penalties or liquidate exposed holdings.

Last week, Russia moved to turn a recently nationalized top-10 bank into the key lender for the defense industry, thus limiting the role of bigger state banks such as VTB and Sberbank PJSC from the strategically sensitive business and possibly insulating them from a new round of sanctions.

While VTB has been subject to restrictions on raising financing since 2014 after Russia’s annexation of Crimea from Ukraine, new sanctions could go as far as cutting off access to the U.S. financial system and seizing assets held in America.

“There is very little we know about possible sanctions, so we just have to wait until next week when Treasury promised to announce certain measures or certain lists,” Kostin said.

To contact the reporters on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net, Francine Lacqua in Davos at flacqua@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Paul Armstrong, Jon Menon

©2018 Bloomberg L.P.

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