Cutting Russia from SWIFT banking system could create havoc in steel dynamics
With Russian steel mills being prominent supplier of steel to EU, even the remote possibility of blocking SWIFT banking transactions raises great concerns as non-availability of Russian steel to European users would prove to be a total game changer for European steel mills, which are running much below their optimum capacities but would likely create havoc in other steel markets. However the chances of such eventuality are less than a meteorite hitting Eiffel Tower
Sputnik News quoted Mr Giuseppe Scognamiglio head of public affairs at UniCredit Group Italy as saying that cutting Russia out of the global banking payment system SWIFT could turn into a catastrophe for the overall system of payments in Europe. Mr Scognamiglio told a seminar on the Ukrainian economy in Washington “We need to be very, very careful when thinking about expanding sanctions against Russia amid the Ukrainian crisis. Blocking Moscow from SWIFT in conditions when the trade turnover between Europe and Russia exceeds USD 335 billion would lead to two immediate consequences. One is a possible collapse of many western banks. But the second, more strategic, and I think more dangerous in the long-term, is that Russia will be much more effective in adopting a different system of payments, maybe in cooperation with China."
When the EU, US and other states began sanctions against Russia, following the Ukraine crisis, UK Prime Minister Mr David Cameron suggested disconnecting Russia from SWIFT. The idea was also mentioned in a resolution of the European Parliament.
SWIFT is a member-owned cooperative through which the financial world conducts its business operations. It is used for international bank transfers among other things. It has its headquarters in Belgium and has offices in the world's major financial centres, including Russia.
Source : Sputnik News