An exodus of foreign capital is forcing Russian banks to slash lending as the international reaction to the country’s military stand-off with Georgia starts to affect the real economy. Bankers say Russia is facing its worst crisis since the August 1998 default. The Russian stock market has plummeted more than 40 per cent since May. A flight of capital estimated by analysts at up to $20bn (â‚¬14bn, Â£11bn) since the start of the conflict is drying up liquidity. The Russian trading system index fell another 7.5 per cent yesterday to its lowest level since June 2006 … Cash held by banks on deposits at the central bank has been falling day by day, reaching a low of 638.4bn roubles ($25bn, â‚¬18bn, Â£14bn) yesterday from 675.6bn the day before.