A joint statement in this regard was issued by the leaders of the US, European Union, France, Germany, Italy, Britain and Canada on Saturday.
The situation on the world stage has become serious after Russia’s attack on Ukraine. On the one hand, Russia is blasting the explosion in Ukraine, while on the other hand, the US, Canada and the European Commission, taking a tough step against Russia, have announced important sanctions on the other side. These sanctions also include the exclusion of selected Russian banks from the SWIFT messaging system. A joint statement in this regard was issued on Saturday by the leaders of the US, European Union, France, Germany, Italy, Britain and Canada. It said that a joint task force has also been set up to trace and take action against the assets of banned Russian companies and oligarchs. Western leaders have denounced Russian President Vladimir Putin’s actions on Ukraine And said that Moscow is doing all this only to break the morale of Ukraine.
EU, US, France, Germany, Italy, UK, Canada decide to
1. Cut some banks out of the global SWIFT interbank network
2. ‘Paralyse’ the assets of Russia’s central bank
3. Set up a taskforce to go after Russian oligarchs who swan around in luxury in the West#Ukraine— Marc Burleigh (@marcburleigh) February 26, 2022
First of all let us know about Swift. Created in 1970, SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the world’s leading banking communication service, connecting approximately 11,000 banks and financial institutions in over 200 countries, including India. This system is considered extremely important for the smooth running of the global financial system. If Russia gets out of it, it will be a big blow for it. Most of this system is used by the users of America and Russia. According to the national association Rosswift, approximately 300 Russian association institutions use SWIFT.
Germany, the United States, France, Canada, Italy, Great Britain and the European Commission agreed to cut Russia out of the SWIFT global payment system and include limiting the ability of Russia’s central bank to support the rouble https://t.co/m2tkvpMT9v pic.twitter.com/iwmE14XxmB
— Reuters (@Reuters) February 27, 2022
Let us tell you that due to Russia being a major producer of natural oil and gas, some European Union (EU) including Germany have seen disagreement about action on Russia, but the UK government to exclude Russia from the worldwide SWIFT banking network. led this campaign in Europe and it was later agreed upon. At the same time, the US and its allies have said that, “We are committed to taking restrictive measures that will prevent the ‘Russian Central Bank’ from supplying reserves internationally, so that the effects of the sanctions imposed by us.” Don’t be weak.”
If we talk about the impact of this ban on Russian banks, then the closure of the Russian Bank SWIFT service will restrict Russia’s access to financial markets around the world. This would make it difficult for Russian companies as well as citizens to pay for imports and obtain cash for exports. Also selling goods to Russia will also become riskier and more expensive. However, Russian banks can use alternative messaging systems such as phones, messaging apps or email to make payments through banks in countries that have not imposed sanctions. But they can be less efficient and insecure. At the same time, transaction volumes may also drop and costs may also increase.