Why cutting Russia from SWIFT is bad for the west
The west was repeatedly threatening to cut Russia off from the global payment system.
The United States, the European Union, and other Western allies had threatened to cut Russia off from SWIFT, a crucial international financial mechanism after it announced it was carrying out a special military operation in Ukraine.
On Saturday, as the Russian military stepped up its operation, including restoring water to Crimea, Western allies attempted to cripple the country's banking sector and currency by disconnecting selected banks from the international money-transfer system, severely limiting Russia's ability to trade with the rest of the world.
The United States, Canada, the European Commission, the United Kingdom, France, Germany, and Italy all supported the measures. In a statement, the group of world powers said it was "resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies."
Swift in Russia
According to the national association Rosswift, Russia has the highest amount of users behind the US, with some 300 Russian financial institutions belonging to the system.
More than half of Russia's financial institutions are members of SWIFT, it added.
It is not in Europe's favor to cut Russia off as the Europeans rely heavily on Russian trade and such action would complicate trade between Russia and European countries.
Guntram Wolff, director of the Brussels-based Bruegel think tank, told AFP that the advantages and disadvantages of disconnecting Russia from SWIFT are "debatable".
Wolff added that "operationally, it would be a real headache," particularly for the European nations that do a lot of business with Russia, which is their single largest supplier of natural gas.
Additionally, the exclusion of a powerful country like Russia (also a major oil exporter) may prompt Moscow to speed the creation of a substitute transfer mechanism, maybe with China.
The European Union had agreed Friday to freeze European assets linked to Russian President Vladimir Putin and Foreign Minister Sergey Lavrov.
Russia does have its own local financial infrastructures, such as the SPFS system for bank transfers and the Mir system for card payments, which are both similar to the Visa and Mastercard systems.