Monday, February 2, 2015

Cutoff of Russia from SWIFT banking system is threatened - New Cold War: Ukraine and Beyond

What SWIFT threats would mean for Russia

By Howard Amos, The Moscow Times, Jan. 28 2015

Discussions among European leaders about new sanctions on Moscow [following rebel military advances in eastern Ukraine] have again raised fears that the SWIFT international payments system might be cut off, a move that experts warn would wreak financial havoc on Russia.

The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a cornerstone of the world’s financial architecture and integral to the functioning of Russia’s stock exchanges and its Central Depositary, as well its banks and companies. In 2012, Western countries forced the Belgium-based payments system to cut ties with Iran, a move credited with bringing Tehran to the negotiating table over its nuclear program.

“Before SWIFT they used telexes, which are now in museums,” said Vasily Solodkov, head of the Banking Institute at the Higher School of Economics. “Russia used to use stallions and sticks as money and we could return to that, but why?” he asked.

Under discussion

Amid surging violence in eastern Ukraine fueled by Kremlin support for a separatist rebellion, European foreign ministers are currently considering what to include in a new round of sanctions. The new restrictions are likely to be signed off by EU leaders at a Feb. 12 summit.*

Complete story at - Cutoff of Russia from SWIFT banking system is threatened - New Cold War: Ukraine and Beyond

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