Leaders from Europe, the UK, the US and Cahada have decided to remove some Russian banks from SWIFT.
In Brief:
Th decision to remove the banks from the global financial messaging system is a result of the Russian invasion of Ukraine.
It’s part of a number of sanctions to be put in place over the coming days.
What does this mean?
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the Belgium-based organisation that enables money to be transferred internationally, across over 11,000 institutions and over 200 countries. It was developed by a group of about 2,000 US and European institutions. This “financial messaging” system handles around 40m such “messages” per day.
Removing a number of banks from SWIFT will mean they can no longer make international transfers through the system. There are still some other ways to make these transfers but they are less efficient, and for example when Iran was removed from SWIFT (the only country to have ever been removed), its foreign trade fell by 30%.
The EU, UK, US and Canada believe that this is the toughest financial sanction they have on the table for Russia.
