Finance

BBC reports that some Russian banks will be cut from SWIFT international payment system

by Charlie Smith on February 26th, 2022 at 3:31 PM
    1 of 1 2 of 1

      There appears to be a very significant development in Russia's war of aggression on Ukraine.

      According to the British Broadcasting Corporation, the European Union, the U.S., and other allies, including Canada, have agreed to sever some Russian banks' links to an international payment system.

      SWIFT, a.k.a. the Society for Worldwide Interbank Financial Telecommunication, facilitates international trade by providing secure messaging service for currency transactions.

      "This is intended to cut off these institutions from international financial flows, which will massively restrict their global operations," a German government spokesman said, according to the BBC report.

      This measure will apply to financial institutions that have already been sanctioned, including Sberbank and VTB Bank, which are the two largest in Russia. Together, they hold more than half of all the assets in Russia's banking system, according to Bankingdive.com.

      On Friday (January 25), Canadian prime minister Justin Trudeau called for this action in response to what he called Russia's "barbaric" invasion of Ukraine.

      "This is in line with our commitment to impose steep costs on Russia—which would make it even more diffiult for President Putin to finance his brutalities," Trudeau tweeted.

      If Russian banks have no access to SWIFT, it may make it more difficult for the country to sell oil and gas, which provides an estimated 40 percent of Russian government revenues.

       

      Comments