U.K. Wants EU to Block Russia From SWIFT Banking Network

[jakeXT]

Source: Bloomberg

The U.K. will press European Union leaders to consider blocking Russian access to the SWIFT banking transaction system under an expansion of sanctions over the conflict in Ukraine, a British government official said.

The Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, is one of Russia’s main connections to the international financial system. Prime Minister David Cameron’s government plans to put the topic on the agenda for a meeting of EU leaders in Brussels tomorrow, according to the official, who asked not to be named because the discussions are private.
“Blocking Russia from the SWIFT system would be a very serious escalation in sanctions against Russia and would most certainly result in equally tough retaliatory actions by Russia,” said Chris Weafer, a senior partner at Moscow-based consulting firm Macro Advisory. “An exclusion from SWIFT would not block major trade deals but would cause problems in cross-border banking and that would disrupt trade flows.”

The move underscores Europe’s growing concern at Russia’s latest incursion into Ukraine, with casualties mounting amid the threat that conflict descends into an all-out war on the EU’s eastern flank. The U.K. wants the EU to respond by ratcheting up sanctions against Russia to bring them more into alignment with those imposed by the U.S., said the official.



Read more: http://mobile.bloomberg.com/news/2014-08-29/u-k-wants-eu-to-block-russia-from-swift-banking-network.html

[Ruby the Liberal]

1. That is huge

There isn't a backup - SWIFT is it.

[newthinking]

3. Also incredibly stupid.

Let's further isolate the Russians economically and push them toward being more independent.

People who think something like this would work have no understanding of the Russian culture.

Russians *expect* that life will have serious suffering, it is part of their culture. Russia (and Ukraine) weathered an incredibly deep economic breakdown far more serious than our depression less than 20 years ago and they weathered it remarkably well.

If the sanctions were to actually throw them into another very deep run, not only would they weather it well but this time they would see it as a sort of "persecution" and unify. We would actually energize them and they will work with incredible determination to reform their economy to be extremely independent. And they would likely be successful.

[cosmicone]

2. Another stupid move by the west

The world doesn't like Western control of SWIFT as it is and onerous American overreach with FATCA and other laws. The world has figured out a way around FATCA nad they will find a way around SWIFT as well.

The dollar is fast losing its hegemony.

[Ruby the Liberal]

5. Did you mean the Euro?

SWIFT is in Belgium.

[cosmicone]

6. 80% of currency transfers via SWIFT are in US Dollars. n/t

[Ruby the Liberal]

7. Did not know that

We only send FX through SWIFT.

[Cayenne]

4. This will accelerate de-dollarization