The weapon has been used against Iranian banks since 2012, and the US and UK have been pressing for similar action against Russia in response to its support of the Donbass rebellion in east Ukraine. Tett reports that SWIFT, the Brussels-based banking consortium which is the gateway to the global interbank payments network, has publicly condemned the resolution.
The fear within the financial industry is that the move could provoke Russia to ally with China and other countries to set up a parallel system to rival SWIFT, adversely affecting Western trade and financial interests.
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Reports of the death of economic ties between Russia and the West are greatly exaggerated (Part 2). Today's Wall Street Journal reports on Russian president Vladimir Putin's reassurances to Western investors that Russia is still very much open for business despite sanctions which have encouraged it to pursue closer economic relations with China.
Speaking at an annual international investment conference in Moscow, Putin dismissed business concerns that Russia was moving to institute capital controls to protect the ruble or was seeking to stem the growth of the private sector since the dissolution of the Soviet Union.
He described the sanctions as “obviously total idiocy on the part of the governments that are limiting their own business, hampering its operations, lowering its competitiveness."
Other Russian government and business leaders also sought to persuade the 1500 conference participants that the economy would remain open to foreign investment and that proposals for currency controls circulating within Russia wouldn’t be implemented. Anxious Western financiers attending the conference were reportedly unmoved by the assurances.
(These are each behind a paywall. Write me offlist if you want the text.)