I'm attempting to parse through the loaded market commentary from Zoltan Pozsar as featured here. At one point, he makes the interesting assertion:
Pozsar cautions that "if things escalate, it’s hard not to see a direct impact on FX swaps and U.S. dollar Libor fixings given Russia’s vast financial surpluses and where those surpluses are deployed."
I interpret this to mean since Russia maintains a lofty current account surplus, it has enough eurodollars to move the market. To avoid settlement risk (from being ex-communicated from SWIFT), it may uproot all its USD holdings and leave major gaps in the balance sheet of its former counterparties in western Europe. However, Zoltan never mentioned it had anything to do with size; just that Russia was a "surplus agent." Either way, I'm not sure how exactly this leads to 'direct impact on USD Libor fixings.'
Can someone provide a clearer explanation of the cause and effect relationship between where Russia parks its short-term capital and the reportedly outsized effect on Libor? (Blue collar explanation is acceptable too)