U.S. Contemplating Isolating Russia from SWIFT Banking System

[cabron]

Cutting Swift for Russia was done a long time ago that's why they do have their own. ...

Nope, many banks in Russia are perfectly able to use SWIFT, particularly for their banking operations with Europe. These flows of capital are really the bread an butter of many Russian bankers and cannot be replaced by "their own system" which only would work between themselves and will not be accepted by the rest of the banks. Cutting Rusia from SWIFT would deal a blow to their operations in the West, which means that they would eventually reach an agreement with China and their satellites. This is not where you would want to go for a solid economy for sure.

As of now, there are just 400 institutions part of it as written in Wikipedia which countries involve are China, India and Iran.

At the end of 2020, 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland.

System for Transfer of Financial Messages (SPFS) - https://en.wikipedia.org/wiki/SPFS

And because Russia is also a supplier of gas and coal, they can live to demand the use of their own system which I think SWIFT will not hurt them much in the end.

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[stompix]

And because Russia is also a supplier of gas and coal, they can live to demand the use of their own system which I think SWIFT will not hurt them much in the end.

I keep telling you and others, that's not how SWIFT works.
You think for it like some moneygram or westernunion or visa service when it's not!

European countries would pay Russia for gas the same way, send the money to a bank account and that's all, the problem will still be in Russia's court since in order to use that money fast and settle other debts with other banks he has no longer the link in the SWIFT systems.
You can't force a client to pay via SWIFT, there is no money being transferred in his system, it's the bank that receives the transfer that uses it in interbanking connection, so the banks that receive the payments can use SPFS, that doesn't help them at all if the banks in Europe who would receive those payments for other goods don't!

So it's not like a shop no longer accepting Visa or Mastercard, it's more like the push notification that your merchant's account has received the x in payment and you can pay your supplier y for the next batch of merchandise.

[DrBeer]

Cutting Swift for Russia was done a long time ago that's why they do have their own. ...

Nope, many banks in Russia are perfectly able to use SWIFT, particularly for their banking operations with Europe. These flows of capital are really the bread an butter of many Russian bankers and cannot be replaced by "their own system" which only would work between themselves and will not be accepted by the rest of the banks. Cutting Rusia from SWIFT would deal a blow to their operations in the West, which means that they would eventually reach an agreement with China and their satellites. This is not where you would want to go for a solid economy for sure.

In Russia, the fantasy on the theme "China is our brotherly people who also wants to destroy the United States" is very fashionable. China, of course, is "that little thing", but China has never been a "brother" of Russia, moreover, China has absolutely clear plans on the territory of Russia from the Urals to Kamchatka. Moreover, for China, Russia, as an adversary, is a more convenient target. And it seems that now China is implementing the principle of "Calmly watch the flow of the river, and someday you will see the corpse of your enemy float along the river." China is waiting for the weakening of Russia. Russia for China is a resource appendage, the USA is a consumer of the product of the global market of China. With whom in your China is it more profitable to be partners, albeit with a different worldview?

[Silberman]

Cutting Swift for Russia was done a long time ago that's why they do have their own. Russia isn't afraid of that anymore. No sanctions can make them back out from US.

Apparently, you got the news from a media that simply is producing news in favor of Ukraine and US. You got it all wrong. There is no invasion there nor hacking, the US just needs a bogeyman to start a war for their failing Empire which thier money comes from wars that always fail. If it isn't the weak Biden that is their president today, things like this wouldn't be happening, US should replace that guy. Otherwise, they will continue to fail even when they lure Ukraine to join NATO that isn't allowed in the treaty they have signed.

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down to die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

[Sithara007]

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down do die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

The question is not whether the Americans are able to fight the Russians. The real question is whether they can afford such a conflict. Look at what happened in Afghanistan, which is a third world country of 30 million people. After spending trillions of USD in funds, the Americans ran back to their homeland with their tails wagging between their legs. The same thing happened in Syria, Iraq and Libya as well. And here we are talking about an adversary who is stronger by the magnitude of 100x or 200x.

[DrBeer]

Cutting Swift for Russia was done a long time ago that's why they do have their own. Russia isn't afraid of that anymore. No sanctions can make them back out from US.

Apparently, you got the news from a media that simply is producing news in favor of Ukraine and US. You got it all wrong. There is no invasion there nor hacking, the US just needs a bogeyman to start a war for their failing Empire which thier money comes from wars that always fail. If it isn't the weak Biden that is their president today, things like this wouldn't be happening, US should replace that guy. Otherwise, they will continue to fail even when they lure Ukraine to join NATO that isn't allowed in the treaty they have signed.

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down do die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

It is a mistake - the Kremlin criminals will not destroy Europe and the United States - the places where their money, savings are kept, where all the wealth stolen in Russia is taken away. They will not destroy countries - where are their villas, planes and sports cars. Those countries - where their children live and conduct business, where their mistresses and lovers live, where their women, favorite dogs and places of rest, where they constantly fly. They would rather wipe Russian Voronezh off the face of the earth than, for example, Los Angeles

[Argoo]

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down do die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

The question is not whether the Americans are able to fight the Russians. The real question is whether they can afford such a conflict. Look at what happened in Afghanistan, which is a third world country of 30 million people. After spending trillions of USD in funds, the Americans ran back to their homeland with their tails wagging between their legs. The same thing happened in Syria, Iraq and Libya as well. And here we are talking about an adversary who is stronger by the magnitude of 100x or 200x.

If the Russian government continues to behave aggressively, threatening the use of weapons to the whole world, then the US government will be forced to fight with them. As for Afghanistan, the Americans have been there for 20 years. They trained and armed government troops there, but they cannot fight forever instead of them. Therefore, they left there, doing everything possible for the government troops to fight the Taliban further. It is not their fault that the Afghan government troops have shown cowardice.

[hello_good_sir]

They will probably look to pushing out their own CBDC much quicker than anticipated as a result of this.

This is one of the reasons why fiat is flawed, though.

All of the control to restrict access to a particular sector of the monetary system resides within the hands of one central entity, and it's just not going to be effective that way in the long run.

On top of CBDCs, hopefully Russia looks to expand their presence in the decentralized crypto space as well.

[Silberman]

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down do die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

The question is not whether the Americans are able to fight the Russians. The real question is whether they can afford such a conflict. Look at what happened in Afghanistan, which is a third world country of 30 million people. After spending trillions of USD in funds, the Americans ran back to their homeland with their tails wagging between their legs. The same thing happened in Syria, Iraq and Libya as well. And here we are talking about an adversary who is stronger by the magnitude of 100x or 200x.

If the Russian government continues to behave aggressively, threatening the use of weapons to the whole world, then the US government will be forced to fight with them. As for Afghanistan, the Americans have been there for 20 years. They trained and armed government troops there, but they cannot fight forever instead of them. Therefore, they left there, doing everything possible for the government troops to fight the Taliban further. It is not their fault that the Afghan government troops have shown cowardice.

The rise of nuclear weapons make a direct confrontation between the US and Russia unthinkable, and if that was not enough biological weapons are also at disposal of both countries which are even worst than nuclear weapons, however what we could see are proxy wars, wars in which an ally of one of those countries wears down the other if they engage in a military conflict, and we could also see the use of economic sanctions against certain individuals or the whole country in case the diplomatic relationships deteriorate even more.

[Blue0x.com]

Using an outdated system backed by nothing but faith and a military as a weapon is not going to end well for the United States.  Sanctions reveal to the world that the US does not, in fact, operate in a free and fair market.

[DrBeer]

If that is what they are trying to do then that is a big mistake, Russia has nuclear weapons and regardless of whatever technological advancements the US may have fighting an aggression war against Russia is a huge mistake, Empires have gone down do die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

The question is not whether the Americans are able to fight the Russians. The real question is whether they can afford such a conflict. Look at what happened in Afghanistan, which is a third world country of 30 million people. After spending trillions of USD in funds, the Americans ran back to their homeland with their tails wagging between their legs. The same thing happened in Syria, Iraq and Libya as well. And here we are talking about an adversary who is stronger by the magnitude of 100x or 200x.

If the Russian government continues to behave aggressively, threatening the use of weapons to the whole world, then the US government will be forced to fight with them. As for Afghanistan, the Americans have been there for 20 years. They trained and armed government troops there, but they cannot fight forever instead of them. Therefore, they left there, doing everything possible for the government troops to fight the Taliban further. It is not their fault that the Afghan government troops have shown cowardice.

The rise of nuclear weapons make a direct confrontation between the US and Russia unthinkable, and if that was not enough biological weapons are also at disposal of both countries which are even worst than nuclear weapons, however what we could see are proxy wars, wars in which an ally of one of those countries wears down the other if they engage in a military conflict, and we could also see the use of economic sanctions against certain individuals or the whole country in case the diplomatic relationships deteriorate even more.

You are a little mistaken - Russia does not need a war with NATO or the United States. The Russian Federation is well aware that in a non-nuclear war, the Russian army will be defeated quickly enough, and the current government will be physically destroyed, or it will be seized, undergo a shameful trial and will be destroyed as international criminals. A nuclear war is unnecessary for both the United States and the Russian Federation. The USA does not want to perish, the generals of Russia do not want to destroy their children and grandchildren, as well as their calm, rich pension in the same USA, where they have been withdrawing their money all their lives
Russia needs the opportunity to realize its imperial ambitions, to "collect" back the countries that were once occupied by the Moscow empire, in order to show the "greatness" to its poor population that has no future. Why does the Russian Federation have so much attention to Ukraine? Because Ukraine tried to escape from the "embrace" of Russia and start living like civilized countries. For Russia, this is like death - if Ukraine succeeds (and everyone is talking about it now), the Kremlin ghouls will have to explain in front of 100+ million angry, poorer, aging population how it turns out that in Ukraine, where there are no such resources as in Russia, people live better than in the "richest Russia". This means that we will have to tell you that all the money was stolen by Putin's friends, and the population can cut social services, cut budgets for medicine and education ...
And about the "imperial ambitions" - if you read the Kremlin ultimatum - there are often indicated the territories that the Russian Federation needs - "the countries that were previously part of the USSR."

[paxmao]

Cutting Swift for Russia was done a long time ago that's why they do have their own. ...

Nope, many banks in Russia are perfectly able to use SWIFT, particularly for their banking operations with Europe. These flows of capital are really the bread an butter of many Russian bankers and cannot be replaced by "their own system" which only would work between themselves and will not be accepted by the rest of the banks. Cutting Rusia from SWIFT would deal a blow to their operations in the West, which means that they would eventually reach an agreement with China and their satellites. This is not where you would want to go for a solid economy for sure.

As of now, there are just 400 institutions part of it as written in Wikipedia which countries involve are China, India and Iran.

At the end of 2020, 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland.

System for Transfer of Financial Messages (SPFS) - https://en.wikipedia.org/wiki/SPFS

And because Russia is also a supplier of gas and coal, they can live to demand the use of their own system which I think SWIFT will not hurt them much in the end.

Are you sure you understand what we are talking about? We are talking about the standard for fast bank transfers. AFAIK there are not that many systems out there. Perhaps US has its own, UK has certainly his own and there may be other, but SWIFT is widely used and it is used in Russia as of now for certain.

https://www.economist.com/finance-and-economics/2021/12/18/the-hidden-costs-of-cutting-russia-off-from-swift

This is behind a paywall so I will quote some for you:

With America and its allies loth to commit forces, another option is gaining prominence: cutting Russia off from swift, the messaging network used by 11,000 banks in 200 countries to make cross-border payments. Flicking a switch seems safer than putting boots on the ground. But it could have dangerous consequences.

Changing this will equate to a decoupling of the systems, giving China a chance:

firm. It would provide China with the impetus to bolster cips, its rival to swift, just as America’s other foes look for alternatives. The network, which already counts some big foreign banks as members, allows messages to be transmitted in both Chinese and English

[stompix]

Look at what happened in Afghanistan, which is a third world country of 30 million people. After spending trillions of USD in funds, the Americans ran back to their homeland with their tails wagging between their legs. The same thing happened in Syria, Iraq and Libya as well. And here we are talking about an adversary who is stronger by the magnitude of 100x or 200x.

Who run away? Oh, are you maybe talking about 1989?
The US has occupied Afghanistan in two months and controlled it for 20 years, they decided to pull back and that's it, can you give an example of a battle where the Talibans have defeated the US army in the past year to trigger that panic?

But to add more flavor to this crappy whataboutism, you have to admit it's quite funny to talk about the failure of the US in Afghanistan when Russia invaded the same country without even declaring war and with more personal and more thanks than the alies had in the Gulf war and Irak war combined.
Yeah, let's pitchfork those evil Americans, just with a  small delay, till any of you manage to tell me why was Afghanistan invaded by Russia in the first place, the event that triggered all this mess. But you will need to look for that answer in some other places, not russiatoday or old Pravda editions.

Empires have gone down to die on the cold of Russia, in a way it makes sense as when an Empire is in crisis historically it tries to find an enemy to unite their people and try to gain an economic advantage, but it is too dangerous to do this against Russia.

Ironic that this cold didn't work exactly when the Russian Empire needed it the most. I really need to check some Russian history books, do they miss world war 1 or 1904, or the Crimean war? 

Seriously, guys, we're talking about a gas station with an economy smaller than any of the top 3 states of the US alone, you have to be completely brainwashed in some KGB dungeon to even believe for a second somebody that matter 0.0000001% on this talent would choose to side with Russia in a complete economic war between those two. Do you think China would throw away a 30 trillion market for who? Russia is not making in trade with China even 10% of the Chinese-US balances, how could they even buy with their 1 trillion economy 500 billion of goods? Let's count the EU and there are another 400 billion. China needs to sell stuff for money and Russia has anything but money, except some territories than what a surprise, they've grabbed from China.
The outcome is pretty obvious, it's not even debatable at this point.

[Sithara007]

Who run away? Oh, are you maybe talking about 1989?
The US has occupied Afghanistan in two months and controlled it for 20 years, they decided to pull back and that's it, can you give an example of a battle where the Talibans have defeated the US army in the past year to trigger that panic?

The NATO intervention in Afghanistan ended up the same way as the Soviet intervention of 1979-89. I could see hardly any differences between the two outcomes. Back in the 80s, the Russians were in control of only the major cities, while most of the rural area was under the control of the Taliban. The same happened during the NATO intervention as well. The only major difference I could notice is that Russia (i.e the former USSR) only spent a few billions of USD in Afghanistan, while the Americans wasted a few trillion $$$.

[so98nn]

Thats terrific news. Im wondering how US took this much aggressive step while cutting them off. Though rivalries are their but banking used to be considered as backbone for any country. The main reason is businesses that runs on the import export nature has to gain the money from border based payment.

How about off shore settled companies from US to Russia and Vice versa would work? Because giant firms always need to send and receive money from their internal departments for production, expansion, operational activities and sometime salaries too.

This will literally not help USA gain anything from this. Even Russia will get affected with this but at the cost of huge losses in taxes. Now as the banking is cut off for them, the businesses may try to flee the money via black ways or under the table ways. That will cause serious consequences to US and Russia both.

I think they are forgetting that Taxes not only get generated from within the country businesses but also from the off shore businesses.

[stompix]

~

In case you might have forgotten what I asked you although it seems quite strange for it, it was for clarification about your previous comment:

the Americans ran back to their homeland with their tails wagging between their legs.

So, either you acknowledge that the Russian ran with their tails wagging before their legs from a 30 million strong country (the same as Ukraine) or you recognize that driven by patriotism spirit for the great bankrupt red bear you've twisted facts and ended up with obvious wrong conclusions.

Oh, and since this topic is mainly about money and less about re-writing history, here is another key difference for you, 10 years since the start of the war the Soviet Union went bankrupt, the US is well past that, in one year we will see if the term after the invasions till holds but I doubt it will.
So, let's stop with stupid comparisons and look at the obvious facts, a country that without nuclear weapons doesn't matter who threatens an alliance that rules the global economy they will build a better system and everyone will join. Who? In the rhythm Russia is losing population by the time they manage to get finally a few partners there will be no Russia anymore.

How about off shore settled companies from US to Russia and Vice versa would work? Because giant firms always need to send and receive money from their internal departments for production, expansion, operational activities and sometime salaries too.

Giants companies can't produce, expand and operate with 140 million poeple who earn less than half what poeple in Texas do. That's why you don't have any major Russian companies other than Rosneft and Gazprom.
Again, poeple who are driven by their hate of the US into applauding the red parade without even bothering to check reality should take a break and do so ...

How about off shore settled companies from US to Russia and Vice versa would work?

Again, you don't understand how SWIFT works.
Those are not carrier pigeons that are shot down if they fly from the US to Russia and they would work if they are housed in Vladivostok and Costa Rica, the moment Russia is cut from the SWIFT off-shore won't work just isn't working for North Korea.
 

[DrBeer]

Who run away? Oh, are you maybe talking about 1989?
The US has occupied Afghanistan in two months and controlled it for 20 years, they decided to pull back and that's it, can you give an example of a battle where the Talibans have defeated the US army in the past year to trigger that panic?

The NATO intervention in Afghanistan ended up the same way as the Soviet intervention of 1979-89. I could see hardly any differences between the two outcomes. Back in the 80s, the Russians were in control of only the major cities, while most of the rural area was under the control of the Taliban. The same happened during the NATO intervention as well. The only major difference I could notice is that Russia (i.e the former USSR) only spent a few billions of USD in Afghanistan, while the Americans wasted a few trillion $$$.

But - the result of these "several billions" spent was the complete degradation of the Soviet economy, we are not talking about a total drop in living standards, degradation of the community and much more, which ultimately led to the collapse of the USSR.
And the USA just printed new pieces of paper and that's it ... Do you feel the difference ?!

[Kakmakr]

I always thought SWIFT was just a large inter Bank accounting system. So instead of transferring small amounts ..every time when there are international transactions.... the Banks collect the data from all transactions being made and then collectively balance the books for all those transactions. (A type of reconciliation for International Bank Settlements) 

Should this be the case.... then Russian businesses and Banks working with SWIFT will have to find other ways to transact with each other to do international transfers. (or alternatively transfer money to countries that are not being isolated/sanctioned) 

[DrBeer]

I always thought SWIFT was just a large inter Bank accounting system. So instead of transferring small amounts ..every time when there are international transactions.... the Banks collect the data from all transactions being made and then collectively balance the books for all those transactions. (A type of reconciliation for International Bank Settlements) 

Should this be the case.... then Russian businesses and Banks working with SWIFT will have to find other ways to transact with each other to do international transfers. (or alternatively transfer money to countries that are not being isolated/sanctioned) 

No one would threaten to disconnect from SWIFT if it were a simple transactional system. In fact, this is a much broader system, without which even entire segments of the economy of a country or region can simply stop working. Remember Iran? How is it "simple banking system" nearly returned Iran to the Stone Age. For Russia, this is a terrible threat, because she needs currency. No, not ayun, not your own ruble, but dollars and euros, they depend on Western technologies and goods! And they can get currency only by selling oil and gas to the developed world and to Europe, and without SWIFT this will no longer work ...

[Sithara007]

But - the result of these "several billions" spent was the complete degradation of the Soviet economy, we are not talking about a total drop in living standards, degradation of the community and much more, which ultimately led to the collapse of the USSR.
And the USA just printed new pieces of paper and that's it ... Do you feel the difference ?!

Well.. most of this is true. When the invasion started in 1979, the Soviet economy was in (relatively) good shape. But after a few years, the crude oil prices plummeted, and the junta was unable to subsidize the Afghan communists. At this point, they should have pulled out from Afghanistan. But they persisted for another decade or so, and stopped their intervention only in 1992. And it is not just Afghanistan. The USSR was involved in cold war conflicts around the world, including Angola, Mozambique, Sudan, Korea, Nicaragua and Rhodesia.