LONDON, March 18 (Reuters) – As they switch off the lights in Moscow, the world’s top banks face a risk-ridden retreat, juggling obligations to anxious clients and staff while complying with sanctions that have rewritten the rules of doing business in Russia. There is a growing realisation that these sanctions are likely to remain long-term, industry sources told Reuters, which means strategic not just tactical decisions are needed as executives look to protect hard-won improvements to their credibility since the global financial crisis. Citigroup, JPMorgan and Goldman Sachs have committed to helping clients with the complex task of unwinding their Russian operations, whilst at the same time supporting the relocation of staff who wish to leave. “(President Vladimir) Putin has fewer and fewer ways to hit back, he’s in a corner and these people could end up as pawns,” one senior compliance executive at a large U.S. bank said of the effects of Western sanctions on Russia. But the sweeping scope of these sanctions mean banks will need more rather than less manpower in order to ramp up client screening and avoid potentially costly financial penalties for any violations. In a sign of both the immediate strain and the prospect of sustained pressures, alerts about potentially problematic transactions at one institution rose by 50-60% on the first day sanctions were introduced, one source told Reuters. “That must suggest that their operational teams are at least 50-60% smaller than they need to be at this time, so that is definitely a concern,” one of the sources said. While Citi, JPMorgan and Goldman have all closed their doors to new business in Russia, they have declined to comment on whether they might surrender their potentially lucrative Russian banking licenses in the longer term. Around half of the 80 Goldman employees in Moscow have moved or are relocating to Dubai, three sources familiar with the matter said, but the Wall Street firm’s Russia head is remaining in the Russian capital, one source said. JPMorgan has around 160 staff in Moscow, where it has been for 50 years, and a large percentage are Russian nationals who will remain, another source familiar with the matter said. Citi, which had put its consumer business in Russia up for sale before Russia’s invasion of Ukraine, is also mothballing its institutional and wealth management businesses. Citi, Goldman and JPMorgan declined to comment. Asset management firms such as BlackRock and PIMCO will be relying on banks to help mitigate losses on tens of billions of dollars of Russian holdings when trading resumes.Italy’s UniCredit has said it may need to write off 7.4 billion euros in a worst-case winding down of its Russian business, while CEO Andrea Orcel warned that “disentangling” from the country was a huge task. Moody’s, Fitch and S&P Global have slashed their scores on Russia by several notches since the war with Ukraine began, putting the sovereign deep into “junk” territory. Deutsche Bank abruptly changed course after stinging criticism from some investors and politicians, after initially saying it planned to maintain ties with Russia. And Austria’s Raiffeisen, one of the European banks most exposed to Russia, said it was studying a possible withdrawal after earlier saying it had no plans to. NN: Banks and funds and corporations have a 2 trillion dollar exposure to Russia…….. They are fucked. Sanctions are backfiring and may end up giving us a Lehman moment and a 2008 style wipe out…..