The United States, Europe, Britain and Canada ban Russia from using the SWIFT system “financial nuclear bomb” How powerful is SWIFT?

2022-06-14 0 By

On February 26 local time, the United States, the European Union, the United Kingdom and Canada issued a joint statement to ban Russia from using the Society for Worldwide Interbank Financial Telecommunications (SWIFT) international settlement system.The joint statement said the measure would ensure that several major Russian banks were disconnected from the international financial system and hurt their ability to operate globally.They also pledged to impose “restrictive measures” on Russia’s central bank to prevent it from deploying its international reserves in ways that could undermine sanctions.Earlier, European Commission President Ursula von der Leyen announced at a news conference that she would propose to member states that a number of Russian banks be excluded from the SWIFT system, which would prevent them from conducting most financial transactions worldwide and effectively block Imports and exports from Russia.What is SWIFT?SWIFT, one of the world’s two largest clearing systems, was founded in 1973. Its full name is “Global Association for Banking and Financial Telecommunication”. Headquartered in Brussels, Belgium, SWIFT is a non-profit cooperative organization among international banks, which is responsible for managing SWIFT system and providing secure financial information transmission services for banks and other financial institutions and enterprises.SWIFT and CHIPS (short for “New York Clearing House Interbank Payment System”) are the two largest clearing systems in the world, with the latter dominated by the US.That is to say, there are many financial institutions in various countries around the world, and there are differences in standards between countries. When domestic financial institutions conduct transactions with foreign financial institutions, they need a smooth channel, and SWIFT is a major channel for transmitting financial information internationally at present.SWIFT’s messaging platform, products and services connect with more than 11,000 banks, securities institutions, market infrastructure and corporate users in more than 200 countries and regions, according to the latest data.In an official statement, SWIFT said it was a neutral global cooperative founded and operated for the collective benefit of more than 110 million institutions in 200 countries, and that as a systemic global utility, SWIFT had no authority to sanction decisions,Nor will institutions be unilaterally disconnected from the SWIFT system because of political pressure.At the same time, as a Belgian entity, SWIFT will comply fully with applicable EU and Belgian laws and regulations, including EU sanctions laws and regulations.But kicking Russia out of SWIFT, which has long been known as the financial nuke, would be one of the most draconian financial measures.(Integrated from CCTV News, China News Network, upstream news)