This is how hard it is to hit Swift’s penalty on Russia

From the start, there were fears that sanctions against Russia, which meant shutting down Swift, could also have consequences for Russian gas supplies to Europe. But it is now clear That some Russian banks It will be managed from the international financial system SWIFT.

It had dire consequences for Iran

Without it, Russia will have to rely on telephone or fax. That’s according to the White House, which doesn’t exaggerate much, experts say. When it comes to international transactions, Swift is the central nervous system. The description comes from Article on Al Jazeera Describes how Iran was affected by its expulsion from the regime in 2012.

Among other things, oil exports fell from 2.5 million barrels per day in 2011 to about one million barrels per day in 2014. Swift was also considered to have contributed to Iran getting to the negotiating table and finally signing the 2015 nuclear deal.

The bank should prevent access to foreign currencies

Alternatives exist today, but none is as secure and flexible as Swift – the association for global interbank financial communications – when it comes to transferring information between banks and other financial players around the world. On a typical day, about 40 million messages are sent via Swift using BIC codes and IBAN numbers by default.

Some Russian banks are now being phased out from the system, while the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States have agreed to introduce measures to prevent the Russian Central Bank from using its international reserves.

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Preparations have been made since the annexation of Crimea

Besides the United States, Russia is the country that uses the most Swift, According to CBC News. The system is used by about 300 Russian banks.

At the same time, opinions differ on how sensitive Swift’s exclusion is for Russia. Since the issue has already been raised regarding the illegal annexation of Crimea in 2014, Russia has developed its own communications system, SPFS, to which about 400 banks in the country are affiliated. But only dozens of banks outside Russia joined the system.

It can give more effect to stop the bank

Actions taken against the Central Bank of Russia may eventually become more effective, He writes for the New York Times. Russia has been preparing for years to impose sanctions and amassing more than $630 billion in foreign currency that could be used if its ruble lost value – which it has largely done in recent days.

“Sanctions on the central bank will limit its ability to access its foreign exchange reserves,” Emily Kilkris of the Center for a New American Security told the New York Times.

Long queues for cash

As early as Thursday, when the invasion of Ukraine began, residents of Russia began hoarding money. He writes for the Financial Times. After the announcement of Swift’s ban, the search for both the ruble and the dollar intensified in Moscow and other major Russian cities. People must have been seen sitting outside empty ATMs waiting for new cash deliveries. The newspaper wrote that Russians were worried that their bank cards would not be usable, but the central bank was said to have tried to calm the mood.

The Russian banking system is stable and has sufficient capital. The bank must have stated in a statement that all client assets are safe and available at all times.