Louise Story/International Herald Tribune

NEW YORK: When Prime Minister Vladmir Putin of Russia wiped $6 billion in shareholder value from a Russian steel company last month with a few choice words, even risk-taking investors in Russia took notice.

Now, as a military conflict between Russia and Georgia ends its first week, a number of big Wall Street banks are beginning to reassess the stability of their businesses in the oil-rich nation.

And while they are not planning to reverse their investments soon, they are increasingly nervous that Russia’s high-risk, high-reward environment is becoming too much about the risk.

Some investment banks had already begun to pause new debt and stock offerings in recent weeks, unnerved by Putin’s effect on Mechel, a coal mining and steel company whose shares plunged after he criticized its chief executive, and by the departure of the American chief executive of BP’s joint venture in Russia, which is under pressure from the government and BP’s Russian partners.

Financial executives at several Wall Street investment firms, who spoke anonymously because they did not want to antagonize the Russian government, said they were starting to ask whether Russia had become riskier than they had expected.

“We expect some things to be controlled in a directed economy — the question is the unpredictability,” said a senior executive at a United States investment bank. “Russia has become the largest risk in the financial markets.”

For many, that has been reflected in the Russian stock market. Once a hot investment, it has slumped nearly 25 percent in the last two months. Bankers have also pulled back on deals in the same period. Investment banking revenue from Russia was $148 million from mid-July to now. That is down from $260 million from mid-June to mid-July. And, halfway through this month, there have only been eight transactions raising debt for companies in Russia, compared with 37 in July, according to data compiled by Dealogic, a financial services research firm.

Pressure on Russia’s market has grown in part because of uncertainty over whether Putin, the former president and now prime minister, still wields more clout than his successor, Dmitri Medvedev.

A prolonged dispute between BP, the giant British oil concern, and its powerful Russian partners has also rattled the nerves of investors with fresh memories of the dismantling of Yukos, once Russia’s largest private oil company, and the weakening of Shell, once the largest foreign investor in the country.

On Thursday, a Russian court said it had barred Robert Dudley, the chief executive of BP’s Russian joint venture, from office for two years.

To be sure, Western banks have reaped huge gains from investing in Russia, especially through underwritings of debt and stock offerings. This year, Merrill Lynch has made nearly $100 million in fees on investment banking deals in Russia, and JPMorgan Chase was not far behind at $90 million, according to Dealogic. Total investment banking revenues from Russian deals grew 150 percent from 2005 to 2007, and bank executives have been counting on future growth.

But the experience with Mechel in late July raised fresh questions among investment bankers. Many have begun to ask whether they might be caught the next time an unexpected government pronouncement beats down a company’s shares or pushes the Russian stock market lower.

Within the last week, rumors have swirled in the financial community that Gazprom, the Russian natural gas monopoly, held off a debt offering, and that Western bankers met with Russian politicians to express their concerns.

The spate of news has come as the American dollar strengthened against the ruble, and the cost of insuring against Russian government debt has gone up. And then there is the retreat of oil prices, whose role in helping the Russian economy nearly double in size since 2006 may begin to cool, in the view of some bankers.

“There’s been a huge number of bad headlines generated about Russia in the last couple months,” said Roland Nash, the head of research for Renaissance Capital, a Russian investment bank, “and I’m not surprised that that spooks investment banks in London or New York.”

Until recently, investment banking was still hot in Russia, even as it leveled off in other mature economies buffeted by the credit crisis. Investment banking fees in Russia have reached $1.3 billion this year, an amount that is about even with the same period last year, according to Dealogic. In contrast, in the United States, investment banking business is down 34 percent this year.

Merrill Lynch, JPMorgan Chase and Deutsche Bank have made the most money in Russia this year, according to Dealogic, offsetting those companies’ weaker results in the United States. Deutsche Bank, Morgan Stanley and Citigroup earned the most in Russian fees last year.

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