The Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, is the link between banks across the world and provides financial-messaging infrastructure and acts as the world’s main international payments network.
SWIFT serves over 11,000 financial institutions across the world and handles up to 42 million messages a day, according to WTOL.
Following Russia’s attack on Ukraine, states have considered excluding Russia from the system which would make it “incredibly difficult for financial institutions to send money in or out of the country.”
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a Belgium-based cooperative of financial institutions. It is overseen by the National Bank of Belgium in partnership with the U.S. Federal Reserve System and other central banks.
SWIFT is governed by a board consisting of 25 people, including the chairman of the management board at Russia’s Central Counterparty Clearing Centre, Eddie Astanin. SWIFT, which describes itself as a “neutral utility,” is incorporated under Belgian law and must comply with EU regulations.
Unlike a traditional bank, the SWIFT financial system doesn’t hold deposits. It handles millions of messages each day, linking more than 11,000 financial institutions around the world. SWIFT said in 2021, it recorded an average of 42.0 million messages each day.
But with no globally accepted alternative, it is essential for global finance. Banning Russia from SWIFT would make it incredibly difficult for financial institutions to send money in or out of the country.
The move would deliver a sudden blow to the country’s economy and have a significant impact on buyers of oil and gas exports denominated in U.S. dollars.
As the U.S., the U.K. and the European Union impose new sanctions on Russia in response to its actions in Ukraine and consider increasing them, one idea under discussion involves cutting off access to a messaging system called Swift. So central is Swift to the international financial system that any such talk rattles bankers and diplomats alike.
