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Russia Unlikely To Be Cut Off SWIFT For Now By US And The EU

Russia Unlikely To Be Cut Off SWIFT For Now By US And The EU
As part of its sanctions against Russia for invading Ukraine, the United States and the European Union chose not to cut Russia off from the SWIFT global interbank payments system, but US President Joe Biden has stated that the subject might be revisited.
When asked why that step was not done, Biden told reporters that the impact of the sanctions placed on Russian banks outweighed the impact of cutting Russia off from SWIFT, and that other nations had failed to agree on adopting it at this time.
"It is always an option," Biden said. "But right now, that's not the position that the rest of Europe wishes to take."
Despite appeals from many places, several EU sources told Reuters before the penalties were announced that the EU was unlikely to accede to the measure. find out more
Germany's Chancellor, Olaf Scholz, said Germany, an important economic partner of Russia, is opposed to shutting off Russia's access to the payment system at this time, but that such a move may happen later.
"It is very important that we agree those measures that have been prepared - and keep everything else for a situation where it may be necessary to go beyond that," Scholz told reporters, responding to a question on SWIFT, as he arrived to an emergency summit set to discuss Russia's invasion of Ukraine. read more
In a recent meeting, the foreign ministers of the Baltic nations, which were previously governed by Moscow but are now members of NATO and the EU, demanded that Russia be denied access to SWIFT.
Other EU member states are wary of taking such a step because, while it would hurt Russian banks, it would make it difficult for European creditors to recover their funds, and Russia has been developing an alternative payment system anyhow.
"Urgency and consensus is utmost priority at the moment," said an EU diplomat, adding that at this stage it meant no move on SWIFT, because doing so would have such wide-ranging consequences, also in Europe.
"I am not aware of an agreement (on SWIFT sanctions) at this point," said a EU diplomat.  
According to data from the Bank of International Settlements (BIS), European banks account for the majority of the almost $30 billion in foreign bank exposure to Russia.
SWIFT, a messaging network located in Belgium that is widely used by banks to send and receive money transfer orders and information, is supervised by central banks in the US, Japan, and Europe.

Christopher J. Mitchell

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