Posted on 02/26/2022 5:14:03 PM PST by upchuck
NOTE: See video embedded in article.
As Western allies levy increasingly harsher economic sanctions against Russia for its invasion of Ukraine, the latest target involves Russia's access to SWIFT.
An acronym for Society for Worldwide Interbank Financial Telecommunication, SWIFT is a messaging system founded in 1973 that allows large financial institutions to send money to each other.
The Belgian-based cooperative is used by more than 11,000 banks and financial institutions in more than 200 countries and territories, including Russia. It handles 42 million messages a day, facilitating trillions of dollars worth of transactions. Russia accounted for 1.5% of SWIFT transactions in 2020, according to the Financial Times.
The White House announced Saturday evening that the U.S. will be disconnecting some Russian banks from SWIFT in partnership with the European Commission, France, Germany, Italy, the United Kingdom and Canada and are "imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions."
"This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally," the White House said in a statement.
(Excerpt) Read more at abcnews.go.com ...
Great input.
The Qatar pipeline is a disaster in the making by going through Syria. Syria is destroying Europe by allowing massive migration through its territory, when it used to be more of a gatekeeper. Syria can't be trusted.
The only real answer is for Norwegian output to increase as much as possible, while also fast-tracking LNG projects in the US and removing the restrictions and red tape around their operation.
Is it a great answer? No. But it can be done.
“Germany alone relies on Russia for 50% of its energy needs and India + China can easily take up that slack.”
SO WHERE ARE CHINA AND INDIA BUYING THAF AMOUNT FROM TODAY?
Well, yep.
Can imagine that announced gold reserves, when knowing in advance of future actions like upsetting the DSC and possible SWIFT exclusion, could be manipulated over many years to add to when needed, the fog of war. Sun Tsu - appear wealthy when you are poor, appear poor when you are wealthy.
Facade crap.
EU and Germany were against it.
This sort of cherry picking days later does little.
“Why the Biden Administration, Germany and others have resisted cutting off Putin, Russia, the Oligarch’s etc.. from SWIFT is beyond me. Unless Putin/Biden is getting a payoff, there’s no other reason”
Makes more sense than anything else.
“China are apolitical in trade so far.”
Most laughable.
For the most recent example see Lithuania.
Your ChiCom shilling is transparent and sad.
The guy’s a ChiCom supplicant.
For example, suppose that the investment unit of a life insurance company in Hartford needs to pay a real estate developer in Houston for a $100,000,000 share in a large mixed use development. The life insurer can wire the money to the developer's bank, but how will that payment be matched to the correct account for the correct purpose? SWIFT provides a reliable way to do that.
Otherwise, wires of money sit around as clerks try to figure out which payment goes to which account and for what transaction and with what instructions. The old system of telex messages was prone to errors, security lapses, and abuses. Grabbing a few days float on a large sum of money can be very tempting. SWIFT put an end to those kinds of games and many other issues.
In any event, with access denied to SWIFT, the entire Russian economy will suffer as Russian banks have to contrive alternatives and train staff to use them. Give them six months and they may have it up and running -- but with the US and the EU and our allies still trying to gum up the works at every turn by sanctioning any financial intermediaries involved.
"Without SWIFT, payments and the transactions they are attached to would take longer and need more human attention to be processed and would have numerous security and compliance issues and a higher risk of error."
If the Russians thought long and hard about what the rest of the world was going to do, they should have accumulated a large enough stash of cybercurrencies to remove the ability of foreign central banks to use foreign exchange as an effective sanction.
Do you really think that Russia and China are apolitical in trade? Just try getting novelty merchandise made in either place satirizing Putin or Xi. Or worse, try getting a book of investigative reporting published against them or the ruling elite.
I am old enough to have had the experience as a lawyer of closing some large real estate transactions in the 70s before SWIFT was generally available. An essential step was checking with a harried young banker in charge of wires and much else at the local bank to see if the payment wire had been received for our specific transaction and could be matched with an appropriate telex. Every now and then, wires and telexes would get mislaid leading to delays and unhappy clients who had to be placated.
Yep. Every banking system still allows using the old method as a backup.
Taking away SWIFT is a definite pain, but not a complete cease and desist.
Except that the financial intermediaries and other collaborating parties will be risking legal charges for violating sanctions. That may not matter if you are Doctor Evil living in a secret bunker on Skull Island, but most bankers prefer to live in more comfortable quarters.
Trump claimed yesterday that invoking SWIFT sanctions could easily create a domino effect in which the global banking industry would collapse.
People will "look the other way" when Germany is buying some LNG to keep its people a little warmer.
It will just be done through a back door instead of SWIFT.
Trump is very correct. Extremely wealthy people are heavily managed by high net-worth hedge funds.
Margin calls on these funds are not limited to the bad Russians, but to any client of that firm.
Then we start talking about the insurance companies who are insuring those credit default sways and the games begin...
My guess is that Germany will be induced to follow the sanctions regime.
Maybe - but I think our governments are corrupt enough where they will do things behind the scenes with Russia that the rest of us will never know.
Yep.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.