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Mikhail Khodorkovsky@khodorkovsky_en · Aug 20, 2026

I was one of the first private bankers in post-Soviet Russia, and I am no longer sure the money Russians keep in banks…

11 tweets1 min read♥ 3.4Koriginal

Summary

A former Russian private banker warns that Russia's banking system is becoming increasingly hollow, with money diverted to unproductive military spending rather than real economic growth, mirroring the Soviet Union's financial collapse before 1991. Without tangible assets backing digital bank balances, ordinary Russians face potential currency devaluation and capital controls similar to the Pavlov reform.

Summarized by ThreadOut AI from the full thread. May miss nuance — read the thread below.

  1. #1

    I was one of the first private bankers in post-Soviet Russia, and I am no longer sure the money Russians keep in banks today is anything more than digits on a screen. (🧵 Read on for why—and follow for more)

  2. #2

    For four years, all material resources have been poured into the war machine: funding military operations, killing people, and destroying infrastructure in Ukraine. [2/11]

  3. #3

    When you deposit money in a bank, you expect it to back something real: utility pipes being laid, power grids being built, housing being renovated. In reality, this money has not been used for anything remotely productive. [3/11]

  4. #4

    It has been sunk into projects known in advance never to pay for themselves—projects from which capital can never be recovered. A huge share of these investments is tied directly to the invasion. And money spent on war simply vanishes. [4/11]

  5. #5

    It reminds me of the Soviet Union in its dying days. Back then, people went to the state savings banks and saw money listed in their passbooks, but they could not actually withdraw it. [5/11]

  6. #6

    Because the moment they did, inflation exploded into double and triple digits, and the state found ways to lock them out. In 1991, that was the Pavlov currency reform. [6/11]

  7. #7

    This time will be no different. Ordinary people might not run the macroeconomic models, but they feel the reality. And the elites certainly calculate it, they know they are trapped and need a way out. [7/11]

  8. #8

    How will they handle it this time? Most likely by running the printing presses. The easiest looting is already over: the sovereign wealth accumulated during the oil boom years, money that belonged to Russian society, has been spent. [8/11]

  9. #9

    Perhaps they hope this military 'investment' leaves behind real industrial capacity, that factories that can pivot tomorrow to producing cars or consumer goods. That is wishful thinking, it has all been incinerated in the fields of Ukraine. [9/11]

  10. #10

    All that remains are digital entries in bank accounts at Sberbank and across the system. The numbers are there, but there are no tangible assets backing them. [10/11]

  11. #11

    We saw this happen at the end of the USSR. Today, thanks to Putin, Russia is racing in that same direction at breakneck speed. Subscribe to my free Substack for more in-depth analysis of the Russian economy: blog.khodorkovsky.com [11/11]