![]() ![]() Excluding Russia from SWIFT would cause its economy to shrink by 5%, former finance minister Alexei Kudrin estimated in 2014. “The cutoff would terminate all international transactions, trigger currency volatility, and cause massive capital outflows,” Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs, wrote in a paper last year for Carnegie Moscow Center. Removing Russia from SWIFT would make it nearly impossible for financial institutions to send money in or out of the country, delivering a sudden shock to Russian companies and their foreign customers - especially buyers of oil and gas exports denominated in US dollars. US working with allies to shore up energy supplies if Russia invades Ukraine oilfield near Sokolovka village, in the Udmurt Republic, Russia, on Friday, Nov. Oil pumping jacks, also known as "nodding donkeys"in a Rosneft Oil Co. With no globally accepted alternative, it is essential plumbing for global finance. ![]() The Society for Worldwide Interbank Financial Telecommunication was founded in 1973 to replace the telex and is now used by over 11,000 financial institutions to send secure messages and payment orders. “If Russia is disconnected from SWIFT, then we will not receive currency, but buyers, European countries in the first place, will not receive our goods - oil, gas, metals and other important components,” Nikolai Zhuravlev, vice speaker of Russia’s upper house of parliament, said Tuesday, according to state media outlet TASS. ![]() Senior Russian lawmakers have responded by saying that shipments of oil, gas and metals to Europe would stop if that happened. US lawmakers have suggested in recent weeks that Russia could be removed from SWIFT, a high security network that connect thousands of financial institutions around the world. Some are calling it the “nuclear option.”Īs Western governments threaten Russia with a package of unprecedented sanctions aimed at deterring President Vladimir Putin from ordering an invasion of Ukraine, there’s one measure in particular that appears to strike fear at the heart of the Kremlin: cutting the country off from the global banking system. ![]()
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