President Joe Biden and German Chancellor Olaf Scholz have both said that cutting Russia off from the global banking system, Swift, is not being proposed right now.
But what would happen if it was?
Excluding Russia from Swift would risk severe repercussions for banks that are owed money – either now or in the longer term.
This is particularly true in Germany, which has deep financial ties with Russia and feels it has done its share of economic sacrifice by suspending certification of the Nord Stream 2 pipeline.
Although being de-Swifted would be disruptive for Russia, there is an alternate system – called CFPS – that Russia set up after it annexed Crimea in 2014. Similarly, China has also set up a secondary system, CIPS.
Expelling Russia would probably only push it closer to China and play into the hands of the Xi administration, which is keen to “de-dollarise” the world’s financial architecture. This would accelerate that trend and ambition.
Source:bbc.com