Banned Russian banks will be disconnected from the SWIFT system, and the Central Bank reserves will be frozen
The countries of use, the United States, Canada and Britain have agreed on a public SWIFT banking system for Russian banks that have been sanctioned due to Russia’s invasion of Ukraine.
“This ensures that banks are disconnected from the international financial system and damage their ability to operate on a global scale,” statement combined commission of the commission of France, Germany, Italy, Great Britain, Canada and the USA.
“We condemn the decision that Putin deliberately made against the people of Ukraine.
If necessary, other banks from Russia will also be disconnected from SWIFT, said Steffen Hebestreit, spokesman for the German government.
“All Russian banks that have already fallen under the international association, if necessary, other Russian banks are excluded from the SWIFT international payment system. Hebestreit.
This measure has been discussed for a long time, the leaders of different countries called it “the closest”, and Russian officials added that Europe suffers from this no less than Russia.
Freeze of assets BANK of Russia
The head of the European Commission, Ursula von der Leyen, also said that the allies had agreed to freeze the assets of the Bank of Russia.
“We are going to paralyze the assets of the Russian Central Bank,” she said. According to her, this measure will not allow Russia “to use its military budget.”
Russia’s central bank has around $640 billion in foreign exchange reserves, most of which is held by Western central banks such as those in New York, London and Frankfurt. Freezing these funds could have a big effect on the Russian meeting.
The lack of access to Russian banks to gold and foreign exchange reserves deprives him of the ability to regulate banks, as well as deliver interventions to the market and regulate the ruble exchange rate.
Measures against the central bank can lead to financial chaos in Russia – provoke a massive withdrawal of funds from banks, the collapse of the ruble and there is a panic among Russian entrepreneurs.
After new arrests by the West, the Russian banking system is waiting for a “free fall”, announced at a briefing by a White House representative, Reuters reports.
End of golden passports
In the totality of the demands of the United States and its allies, there are three more obligations. historical system. Second, a task force was set up to ensure the effectiveness of the application.
“We are committed to file a grievance and other financial and district interests against officials and elites close to the Russian government, as well as their families and associates, who pursue interests and freeze assets, keep them in our jurisdiction,” the statement said. . Third, the US, Canada and the EU commit to “intensify and coordinate efforts to combat disinformation and other forms of hybrid warfare.”
What is SWIFT and how fast can it be used
SWIFT is not a payment system, but is the main universal channel through which financial institutions of the world exchange orders for money transfer, protocol confirmation and other financial documentation.
There are about 11 thousand organizations in the SWIFT system, including non-financial ones, in almost all countries of the world.
According to some estimates, more than 5 billion messages a year pass through the system.
In some cases, private systems for interbank communications, but it is impossible to make through them in foreign currency, so SWIFT still remains the main data transfer channel.
SWIFT is an independent company that is not subject to a large number of countries and is opposed to being fucked.
However, as a European company registered and based in Estonia, it is forced to comply with the general decision of the EU and disconnect from itself the banks that have fallen under registration.
What does this mean for Russia
Loss of access to SWIFT means not only financial but also reputational loss.
During the years of the Ukrainian crisis, Russia has prepared for such a scenario, and perhaps the economic damage will not be as severe as eight years ago, but all the same, Russian business should prepare for a significant blow.
First of all, the banking sector will have to roll back many years. We assume that one Russian bank will have to transfer the cliff. The confrontation with this order flew away through SWIFT, but now the business will have to look for new ways of communication.
This means a rise in prices and a sharp slowdown in financial flows.
Country sanctions that forced SWIFT shut down banks, and so far only invested against France and Europe.