Russia is suffering from a slow-motion bank run as the Kremlin scavenges for war funding—and it may start seizing recruits for the military too

The Russian financial sector is facing a slow-motion bank run as depositors panic, fearing their money may be seized by the government. In the first half of August, Russians withdrew $3.4 billion from banks, a massive increase from the $7.3 billion withdrawn in July. Former finance officials warn that this situation bears resemblance to the iconic "It's a Wonderful Life" scene, where depositors demand their cash from a struggling building and loan.

The bank run is on track to nearly double the $24.7 billion pace seen in 2022, when Russia launched its invasion of Ukraine. The Kremlin is now forced to seek war funding through coercive measures, including seizing public assets, as its sources of domestic borrowing - such as bond auctions - have become less reliable due to higher borrowing costs and weak investor demand.