The full implications of the Russian invasion of Ukraine for the capital markets are still far from clear. As we recorded this episode, European leaders were meeting at Versailles to discuss, among other things, another gigantic borrowing programme for the EU that could be funded in the bond markets — this time to fund defence and energy. We discuss all that we know so far on this developing story and whether it will make the EU the sort of permanent capital markets presence that defines it as the eurozone’s benchmark issuer.The EU wasn’t the only European institution considering its response, however. A key European Central Bank meeting on Thursday gave the first indication of what monetary policy makers plan to do to combat inflation now that war threatens both even greater rising costs and lower growth. The US Federal Reserve and the Bank of England will follow next week.Closer to the eye of the storm we look at what the world’s major banks are doing about their businesses in Russia. Goldman Sachs and JP Morgan are pulling out but, as we discover, it’s not simply a case of packing up and going home when your clients are all trying to do the same. Finally, we look into something just as complex but where there is even less transparency — whether Russian issuers will be willing and able to comply with the country’s decree that they only pay their bond obligations in roubles, whether that will result in mass defaults and what the long term implications of that will be.