SWIFT. Economy Minister Bruno Le Maire announced the disconnection of many Russian banks from the Swift banking system. The freezing of all the assets of the Russian central bank has also been decided.
[Mis à jour le 28 février 2022 à 15h59] An exceptional situation, exceptional measure. It was only a matter of hours, it’s now official. The Minister of Economy Bruno the Mayor has just announced on BFM TV, this Monday, February 28, 2022the exclusion of Russian banks from the transaction banking network Swift : ” In agreement with our European and American partners, we have removed a number of Russian banks from the Swift payment circuit.” One G7 of the Minister of Finance will also take place tomorrow, Tuesday, March 1, 2022 on the subject.
Today is approx. 70% from Russian banking market which should be completely disconnected from the banking transaction validation system, SWIFT. A small earthquake is underway in the country of the tsars. Despite the disagreement of some Europeans at the start, such as Germany or Italy, more than 300 Russian banks will find themselves unable to carry out the slightest banking transaction, particularly in the energy sector.
Secondly, Bruno the Mayor also announced that all of the Russian central bank holdings have been frozen tonight. which represents tens of billions of euros, and this largely hampers the foreign exchange reserves of the Russian central bank on its ability to finance Russian currency trade. As the Minister for the Economy mentioned, the first effects are already clearly visible for the Russia on “lhe level of the rouble, interest rates and on the financial market“before continuing:”We are continuing the complete inventory of financial assets of real estate, yachts, luxury vehicles that would belong to Russian personalities under European sanctions.” The France will also identify all Russians with assets in Franceand which could therefore be added to the list of European sanctions because of their proximity with the russian power.
Swift is the acronym for “Society for Worldwide Interbank Financial Telecommunication”. Created in 1973, this Belgium-based company acts as an IT intermediary between customers of different banks. In other words, it centralizes transfer orders, like secure electronic messaging between countries. Swift brings together more than 11,600 banking establishments in more than 200 countries. Last year, in 2021, the network transmitted 10.6 billion payment orders in the whole world.
In all likelihood, a large part of the Russian banking market should be completely excluded from the Swift network, until 70% according to information from BFM-TV. Good news for France, the purchases of energy products may not be affected by this maneuver. In particular gas, of which European countries are, for some, extremely dependent on Russia. Subsidiary of Société Générale, the Russian bank Rosbank could also escape system exclusion Swift.
The possibility of an exclusion of Russia from the Swift network could prove extremely penalizing. This would put an end to all international transactions of Russia, enough to generate a massive capital flight. The banking system would clearly be slowed down, and Russia would then have to rely on alternative secure messaging systems. It has actually had its own system for validating banking operations for several years, but totally incomparable with Swift. Only about twenty banks are part of it. The most plausible solution would be to get closer to China, which also owns its own banking transaction processing network. An extremely heavy handicap to fit into the global economy.
As a reminder, Iranian banks were disconnected from the Swift system in 2012. Result? Half of the country’s export earnings had gone up in smoke.
Dramatic for the Russian economy, the disconnection of Swift could also turn against European countries, and France. Second foreign investor in Russia, and first employer with 160,000 employees, France ultimately has a lot to lose from such an act. Also, one of the main Russian banks, Rosbankis owned by… The Societe Generale ! Due to his many economic interests in Russia, the idea of excluding him from the Swift network is a double-edged sword for the old continent.
The war in Ukraine casts doubt on the supply and price of energy. Aside from gas, one question remains central and arouses curiosity, what is the price per barrel of oil in this mess?
Rising almost constantly since December 2021, the price of a barrel is on the way to falling below the symbolic bar of $100. This monday 28 februaryhe reaches $98.60 at 10:30 a.m.