The hidden costs of cutting Russia off from SWIFT

F OR WEEKS Russia has been massing troops and tanks near the Ukrainian border. Neither talks with nor threats from the West have stemmed the flow. 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. A first hurdle would be getting SWIFT to comply. The co-operative of banks, based in Belgium, vows to be politically neutral. Many European countries, such as Germany, do a lot of business with Russia, and may oppose the plan. But there is a precedent. In 2018 America managed to force SWIFT to ditch Iranian banks even in the face of European resistance. America would probably have its way again. It could threaten to pull its own banks from SWIFT , or to seize infrastructure vital to the network, such as a data centre in Virginia. In 2020 it used similar threats to force SITA , a network of global airlines based in Switzerland, to disconnect carriers from countries facing American sanctions. But would… Read full this story

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