Date: 2024-11-03 Page is: DBtxt003.php txt00021775 | |||||||||
FINANCE
WHAT IS SWIFT? Ukraine conflict: What is Swift and why are leaders divided on banning Russia? Original article: https://www.bbc.com/news/business-60521822 Burgess COMMENTARY Peter Burgess | |||||||||
Ukraine conflict: What is Swift and why are leaders divided on banning Russia?
By Russell Hotten ... BBC News
Published February 24th, 2022
IMAGE SOURCE,REUTERS
Demonstrators in Berlin on Friday demand 'no Swift for Russia'
European Union foreign ministers have discussed banning Russia from the Swift payment network, which is pivotal for the smooth transaction of money worldwide.
According to diplomatic sources, the move is being considered as part of further sanctions on Moscow following the invasion of Ukraine.
Ukraine's president Volodymy Zelensky said an ban should be immediate to tighten the screw on Moscow. But several countries are reluctant to act.
Banning Russia from the system - used by thousands of financial institutions - would hit the country's banking network and access to funds. There would, however, be blowback on other countries and companies because, for example, buying oil and gas from Russia would be disrupted.
EU foreign affairs chief Josep Borrell said excluding Russia from Swift 'was considered' by foreign ministers on Friday, but added the move didn't get the 'necessary unanimity'.
Mr Borrell said the move remained a possibility for 'future consideration'.
Defence Secretary Ben Wallace has been pushing for a ban, telling the BBC on Friday: 'Britain wants the Swift system to be turned off for Russia. But unfortunately the Swift system is not in our control. It is not a unilateral decision.'
But ahead of Friday's meeting, Germany's foreign minister, Annalena Baerbock, said Berlin did not believe excluding Moscow from the Swift was the right thing to do at this moment.
She told reporters: 'I can understand - I feel the same way - that in these minutes, in these hours, emotions are running high and that words like 'Swift Agreement' sound very, very strong, but at these moments you have to... keep a cool head.'
Earlier on Friday, France's Finance Minister Bruno Le Maire said a Swift sanction would only be used as a last resort.
What is Swift?
Swift is the global financial artery that allows the smooth and rapid transfer of money across borders. It stands for Society for Worldwide Interbank Financial Telecommunication.
Created in 1973 and based in Belgium, Swift links 11,000 banks and institutions in more than 200 countries.
But Swift is not your traditional High Street bank. It is a sort of instant messaging system that informs users when payments have been sent and arrived.
It sends more than 40 million messages a day, as trillions of dollars change hands between companies and governments.
More than 1% of those messages are thought to involve Russian payments.
What sanctions are being imposed on Russia?
Who owns and controls Swift?
Swift was created by American and European banks, which did not want a single institution developing their own system and having a monopoly.
The network is now jointly-owned by more than 2,000 banks and financial institutions.
It is overseen by the National Bank of Belgium, in partnership with major central banks around the world - including the US Federal Reserve and the Bank of England.
Person counting roubles ... IMAGE SOURCE,REUTERS |