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Heard a finance guy making this argument on radio news. His point was that it was essentially a telecommunication system, which could be replaced by telex or or
by notahacker 5y ago
Heard a finance guy making this argument on radio news. His point was that it was essentially a telecommunication system, which could be replaced by telex or or other messaging service as a less efficient way of getting payments through, or at least important, large payments with cooperating banks and clearing houses. It ruining the coordination of day to day payments seems to have had the desired effect on the Russian economy though.
- alangibson 5y agoThere have already been a lot of new rules put in place blocking transactions with Russian banks, which I guess is meant to take care of the "cooperating banks and clearing houses"
- vishnugupta 5y ago> essentially a telecommunication system Indeed, as implied by the name. “ Society for Worldwide Interbank Financial Telecommunication”
- m12k 5y agoAt the end of the day, the communication system was being used to make promises, based on an assumption that all the institutions involved in the transfer had the incentive and means to keep their promises. The latter is also being drastically undermined at the moment, making the emergence of an alternative ad-hoc "IOU" system less likely.
- Mindwipe 5y agoYes, though the closure of dollar clearance services by US and UK banks also stopped the large important payments, at least via the West. There will still be some facility to do it via China, but China's largest banks are also baulking (mostly because of the rapidly imploding value of the Ruble meaning they don't trust Russian banks to actually send the requisite funds than any great moral imperative I expect by the result is the same), and any Chinese services still willing to co-operate are going to extract a very, very hefty tithe from the Russians to enable it.
- teatree 5y agoThe assumption here is that Chinese banks operate with only a profit movie. Things don't work that way in China, the CCP could compel one or more Chinese banks to co-operate if it serves their geopolitical interests. China would be keen on establishing and testing an alternative to SWIFT & CHIPS, the US stranglehold on financial systems, as they know the US would use it serve her geopolitical interests. Looking at the number of countries sanctioned, there is no dearth of customers. This reminds of Borg from Star Trek, more you use your weapons against them, faster they adapt.
- sealthedeal 5y agoCEO and co-founder of Routefusion, a global payments company. In theory yes you could just setup some other form of communicating between the banks, such as phone calls lol. What you will not get is efficiency, trust, etc etc. You dont just replace SWIFT, Ripple, has been trying for a long time, and are still not close.
- raxxorrax 5y agoI think nobody tried because there was simply no need. Now that killing financial access is used as a political tool in domestic and international conflicts, redundant lines could be established. Doesn't work in the short term of course.
- immibis 5y agoAs long as such sanctions are only being used against dictatorships that deliberately commit mass murder, I don't think there will be very much motivation to replace it.
- raxxorrax 5y agoAny country could be accused by that, it is the nature of politics. The US has gained access to transaction data with the threat of sanctions against Swift. While banks are naturally very forward with compliance, there might be interest in having redundant channels. Would also benefit the privacy of users.