SWIFT. Russia could be excluded from the Swift interbank information system. The European Commission’s proposal is on the way. What consequences for Putin’s Russia? What are the risks for Europe and France? Response elements.
[Mis à jour le 28 février 2022 à 08h06] It is the “nuclear weapon” that could cut the Russia from the rest of the world. After the invasion of Ukraine by Russian troops, this same Russia could very probably see its access to the banking information network cut off. Swift. Despite the disagreement of some Europeans, this maneuver could greatly isolate Russia from international transactions, more than 300 banks in the country use the network and would therefore be unable to carry out the slightest banking transaction, particularly in the energy sector. Germany is for the time being reluctant to apply this heavy sanction vis-à-vis Russia because of the numerous relations and establishments of German companies in the country of the tsars. Also, Olaf Scholz the German Chancellor fears for the energy delivery payment.
According to a press release published on Saturday February 26, late in the evening, the European Commission will proposeexclude many Russian banking institutions from the SWIFT network, supported by Germany, which finally yielded under international pressure. Bruno Le Maire, for his part, was already asserting his positions on Friday February 25 by positioning himself on the side of the countries favorable to the exclusion of Russia from the SWIFT system.
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.
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. 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.