Playing chicken in Kiev

Bank on it, says ratings agency Fitch, there's a difficult transition ahead;

Russian state-owned banks are facing risks over tens of billions of dollars of exposure to crisis-hit Ukraine, which may affect the solvency of some institutions, ratings agency Fitch warned on Tuesday.

Fitch said that Russian state-owned banks are holding the bulk of Russian banks' total exposure to Ukraine of an estimated $28 billion, with the risks involving loans to local companies and businessmen who borrowed funds to acquire Ukrainian assets, it said.

It said the biggest exposures belong to Russia's state development bank Vnesheconombank whose exposure relative to its total equity is a colossal 74 percent, with risks relating to its Ukrainian subsidiary and loans booked on the parent bank's books.

Next comes Gazprombank -- the bank of the state owned gas giant -- with an exposure of 40 percent relative to equity. Gazprombank has no Ukrainian subsidiary but has extended a loan to Ukraine's state energy company Naftogaz.

...."Russian banks' significant exposures to Ukraine may materially impact the solvency of some institutions if borrowers suffer as a result of the heightened political and economic stress," Fitch said.

In other words, Putin bet on the wrong boy (Yanukovich, who is on the lam now).