5 ms·

The actual reason is because SWIFT gives the US/EU visibility into all inter-bank transfers, which provides us intelligence to build sanctions on top of. It's t

by dsl 5y ago

The actual reason is because SWIFT gives the US/EU visibility into all inter-bank transfers, which provides us intelligence to build sanctions on top of. It's the financial equivalent of kicking Russia diplomats out of a building where we have every conference room bugged. https://en.wikipedia.org/wiki/Terrorist_Finance_Tracking_Program https://en.wikipedia.org/wiki/Terrorist_Finance_Tracking_Pro...

s_dev 5y ago
>The actual reason is because SWIFT gives the US/EU visibility into all inter-bank transfers But like clearly it doesn't if Russia and China have their own systems. How would Swift reveal Russian/Chinese internal transactions?
- dogman144 5y ago
  Doesn't have to reveal all transactions to be of extreme value on the whole.
  - s_dev 5y ago
    Given the the EU did remove all of Russian from SWIFT. A lot of these replies are looking very speculative and a bit silly -- simply imagining convoluted explanations where are none like "kicking Russia out of Swift will hurt Europe more".
- gonzo 5y ago
  Lack of traffic is also g2.
throwhauser 5y ago
That makes no sense. If Russia had an effective way to conduct its business without SWIFT in the event of sanctions, it would also have a way to conduct its business outside of SWIFT any time it has something to hide. To follow your analogy, if they had a separate office in a separate building that they could use in the event that they get kicked out of the bugged office, they would already be using it whenever they wanted additional privacy. The only way SWIFT actually forces Russia to be visible is if it's their only option, so no visibility can be lost if they're cut off.
- dsl 5y ago
  Think of SWIFT like the internet. You can build your own new internet, but you also need everyone else to connect to it as well. If a Russian oligarch wants to transfer money to a Swiss bank to buy a new boat, they'd need to convince that Swiss bank to be part of the new network as well. At a practical level, swapping out SWIFT would be like changing the engine in your car. You can do it, but doing so is time consuming and prone to risk. Running more than one at a time just isn't feasible.
  - FpUser 5y ago
    >"Running more than one at a time just isn't feasible." When it comes to money everything is feasible. Banks would use a many systems as needed and will build something on top that will make operations look uniform
  - treis 5y ago
    >If a Russian oligarch wants to transfer money to a Swiss bank to buy a new boat, they'd need to convince that Swiss bank to be part of the new network as well. I don't think it's about being actually able to send a message. It's having the transfer of dollars recognized. Say I send $50 million from my account at Sberbank to UBS and then try to transmit from UBS to my boat builder in the Netherlands. That won't work because UBS won't get $50 million added to their balance sheet because other banks don't recognize the Sberbank -> UBS transfer since it's not on SWIFT. To them, UBS will be trying to spend money it doesn't have and the transfers will get rejected. In short, No SWIFT = No Dollar transfers outside the country.
    - rowls66 5y ago
      Absolutely wrong. SWIFT is just a financial messaging system (secure email for banks). Transfers of USD anywhere in the world ultimately require messages to/from US banks. US regulations require that those messages disclose the ultimate payer and payee of every transfer, and US banks must follow US regulations and block transfers that violate US sanctions. US banks are free to use whatever communications channels they choose, but SWIFT is used for 99% of international transfers today. SWIFT has nothing to do with balance sheets and banks recognizing fund transfers.

by dsl 5y ago

s_dev 5y ago

>The actual reason is because SWIFT gives the US/EU visibility into all inter-bank transfers But like clearly it doesn't if Russia and China have their own systems. How would Swift reveal Russian/Chinese internal transactions?

dogman144 5y ago
Doesn't have to reveal all transactions to be of extreme value on the whole.
- s_dev 5y ago
  Given the the EU did remove all of Russian from SWIFT. A lot of these replies are looking very speculative and a bit silly -- simply imagining convoluted explanations where are none like "kicking Russia out of Swift will hurt Europe more".
gonzo 5y ago
Lack of traffic is also g2.

throwhauser 5y ago

That makes no sense. If Russia had an effective way to conduct its business without SWIFT in the event of sanctions, it would also have a way to conduct its business outside of SWIFT any time it has something to hide. To follow your analogy, if they had a separate office in a separate building that they could use in the event that they get kicked out of the bugged office, they would already be using it whenever they wanted additional privacy. The only way SWIFT actually forces Russia to be visible is if it's their only option, so no visibility can be lost if they're cut off.

dsl 5y ago
Think of SWIFT like the internet. You can build your own new internet, but you also need everyone else to connect to it as well. If a Russian oligarch wants to transfer money to a Swiss bank to buy a new boat, they'd need to convince that Swiss bank to be part of the new network as well. At a practical level, swapping out SWIFT would be like changing the engine in your car. You can do it, but doing so is time consuming and prone to risk. Running more than one at a time just isn't feasible.
- FpUser 5y ago
  >"Running more than one at a time just isn't feasible." When it comes to money everything is feasible. Banks would use a many systems as needed and will build something on top that will make operations look uniform
- treis 5y ago
  >If a Russian oligarch wants to transfer money to a Swiss bank to buy a new boat, they'd need to convince that Swiss bank to be part of the new network as well. I don't think it's about being actually able to send a message. It's having the transfer of dollars recognized. Say I send $50 million from my account at Sberbank to UBS and then try to transmit from UBS to my boat builder in the Netherlands. That won't work because UBS won't get $50 million added to their balance sheet because other banks don't recognize the Sberbank -> UBS transfer since it's not on SWIFT. To them, UBS will be trying to spend money it doesn't have and the transfers will get rejected. In short, No SWIFT = No Dollar transfers outside the country.
  - rowls66 5y ago
    Absolutely wrong. SWIFT is just a financial messaging system (secure email for banks). Transfers of USD anywhere in the world ultimately require messages to/from US banks. US regulations require that those messages disclose the ultimate payer and payee of every transfer, and US banks must follow US regulations and block transfers that violate US sanctions. US banks are free to use whatever communications channels they choose, but SWIFT is used for 99% of international transfers today. SWIFT has nothing to do with balance sheets and banks recognizing fund transfers.