Calls to ban Russia from SWIFT ------------------------------------- Ukraine’s government – and others in the West – have called for Russian institutions to be barred from SWIFT, the secure global payments system, seriously damaging Russia’s ability to trade internationally ------------------------------------- *Society for Worldwide Interbank Financial Telecommunication HOW DOES IT WORK? SWIFT* enables fast cross- border payment orders – NOT money transfers 1 Company A – in U.S. – wants to pay Business B in Russia 2 Business B has account at Russian bank 3 U.S. bank sends SWIFT message to Russian bank over secure network 4 Each bank has account holding money on behalf of the other U.S. BANK VOSTRO “Your” money Company A money paid into account of Russian bank RUSSIAN BANK NOSTRO “Our” money Business B receives funds from account of U.S. bank SWIFT Code ROSYRU21CNT ROSY Rossiya Bank RU Russia 21 Moscow CNT Central branch 5 Russian bank authorised to release funds to Business B If two financial institutions do not have a direct relationship, intermediary banks are found to make connection – adding to cost ------------------------------------- OPPOSITION TO A BAN Could turn to Chinese alternative Cross-border Interbank Payment System designed to boost use of yuan, damaging position of U.S. dollar as global reserve currency Could use other channels including cryptocurrencies such as Bitcoin Russia is main supplier of EU natural gas and fossil fuels ------------------------------------- Sources: SWIFT, Tipalti, Investopedia © GRAPHIC NEWS