The Russian ruble has slumped as much as 41% to 118 against the US dollar as the market wake up to new sanctions against Russia over its invasion of Ukraine. It has since pared some of loss to hover around 110 rubles per US dollar.
The new record low for the Russian currency comes after some of Russian banks were banned from the Swift international payment system and the central bank's liquid assets are frozen, limiting the country's ability to access its overseas reserves.
Russia is heavily reliant on the Swift system for its key oil and gas exports.
The intention is to "further isolate Russia from the international financial system", a joint statement said.
After a downgrade by S&P, Moody's ratings agency said it was also reviewing Russian government bonds to possibly downgrade them to '"junk", which would put Russia in a league of riskier countries that usually have to pay more to borrow.
Russia's state-owned Sberbank Europe AG, headquartered in Austria and with branches in Croatia and Slovenia, has "experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions", the European Central Bank said.
"The European Central Bank (ECB) has assessed that Sberbank Europe AG and its two subsidiaries in the banking union, Sberbank d.d. in Croatia and Sberbank banka d.d. in Slovenia, are failing or likely to fail owing to a deterioration of their liquidity situation," the ECB said in a statement.
"The bank is likely to be unable to pay its debts or other liabilities as they fall due," it added.
