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JCMach1

(27,559 posts)
Thu Feb 24, 2022, 03:51 PM Feb 2022

Greedy European banks/bankers are blocking SWIFT sanctions



The foreign ministers of the Baltic states, once ruled from Moscow but now members of NATO and the EU, called on Thursday to stop Russia's access to SWIFT.



Other EU member states are reluctant to make such a move because, while it would hit Russian banks hard, it would make it tough for European creditors to get their money back


https://www.reuters.com/business/finance/eu-unlikely-cut-russia-off-swift-now-sources-say-2022-02-24/
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Greedy European banks/bankers are blocking SWIFT sanctions (Original Post) JCMach1 Feb 2022 OP
Oligarchs being greedy fools and short term POV irisblue Feb 2022 #1
Dirty fleas on a dog's behind, damn these greedy profiteers chocolatpi Feb 2022 #2
That would be a declaration of war Ohio Joe Feb 2022 #3
The root of all evil... Nevilledog Feb 2022 #4
Blocking Russian access to SWIFT may not be the most effective measure: Emrys Feb 2022 #5

Nevilledog

(51,122 posts)
4. The root of all evil...
Thu Feb 24, 2022, 05:36 PM
Feb 2022


Tweet text:

The Recount
@therecount
The U.S. stock market bounced back Thursday afternoon.

CNN's Matt Egan attributes it to Biden's choice not to impose the maximum sanctions, characterizing the decision as "possibly bullish for the economy and the stock market, even if it's not bullish for democracy."


Watch on Twitter
2:28 PM · Feb 24, 2022

Emrys

(7,242 posts)
5. Blocking Russian access to SWIFT may not be the most effective measure:
Thu Feb 24, 2022, 05:56 PM
Feb 2022

This thread from mid-January hasn't dated badly:

JohannesBorgen

As the Russia/ NATO/US/OSCE talks didn’t make real progress, it’s important to look again at this possibility. Can they cut Russia from SWIFT & would this be Armageddon for Russia?
Bill Browder
@Billbrowder
BREAKING: Draft Russian sanctions bill coming out of the senate includes cutting Russia off of the SWIFT banking system if they invade Ukraine. The US used this against Iran and it set them back to the economic dark ages.

https://www.washingtonpost.com/politics/senate-democrats-with-white-house-backing-unveil-russia-sanctions-bill/2022/01/12/06a4f41e-735e-11ec-8ec6-9d61f7afbe17_story.html


Good & difficult question.
Let’s start with basics: what’s SWIFT? It’s simply a messaging system. A chat app if you want! But it only sends special messages designed for cross-border financial transactions for banks globally, for the 11k banks that are part of the network.
Is it possible to cut Russia from it? The US tried in 2014, and the answer they got from SWIFT was “we will not make unilateral decisions to disconnect institutions from its network as a result of political pressure”. In your face.

That’s because SWIFT is not American, of course. Actually, it’s a “cooperative society” based in Belgium under Belgian law! Seriously! So the owners are the members of the networks, with shares reallocated on a regular basis based on flows.

So, SWIFT must follow EU laws, not US ones – which doesn’t mean it can’t disconnect a country, like it dd with Iran in 2018. This was driven by US sanctions, with no obligation coming from the EU, but, again, they were not forced to do it.
What about Russia? The 291 Russian members represent 1.5% of SWIFT flows (you gotta sell that oil!), ranked 13th globally on all SWIFT messages and 6th on payment messages!
That Is a LOT of messages that could be disrupted, on both ends, and a lot of money (prob ≈800bn$/y).

Would cutting SWIFT access stop all those payments? No, but it would make significantly more difficult. There are other ways to send payments messages… including very old type stuff! (no, not carrier pigeons) but it would be difficult to convince western banks to use them.

Russia is aware of the risk and has alternative routes: SFPS (a system it designed with mostly Russian & CIS banks) and domestic payment systems that were launched after Visa & Mastercard cut them off in 2014. But Western banks would need to join.

What this suggests is that, ultimately, what matters is banning Western (US+EU+Swiss+UK) banks from dealing with Russia - cutting from SWIFT is just making those deals harder + if done only by the US, we could get the same ridiculous attempts of the EU to bypass the sanctions
Remember this?

https://www.gov.uk/government/news/joint-statement-on-the-new-mechanism-to-facilitate-trade-with-iran

So ridiculous that it has almost never been used despite being announced with great fanfare! (the first deal was to send medical equipment to fight Covid.)

What’s the bottom line here: either you have coordinated US/EU sanctions which ban banks from trading with Russia, or you get into complicated stuff that makes transactions messy and difficult, but not impossible. And can you ban all transactions with US/EU banks?

https://threadreaderapp.com/thread/1483039324358729730.html
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