War in Ukraine: Russian banking transactions excluded from the Swift system

Exclude Russian banks from the Swift system, the exchange platform between banks, the threat weighed but, this time, the countries of the European Union have come to an agreement. They decided to disconnect Moscow from the interbank system on Saturday February 26. Some large Russian establishments will be affected. “This will lead to their disconnection from the international financial system,” said the President of the European Commission, Ursula Von Der Leyen. How does this system work? When making a payment, a Russian bank sends a message to a French bank, the code allows you to recognize each other instantly, in a secure way. The order to pay is therefore given.

Without this identification system between banks, financial transactions will be much more complicated for Russia. “It really puts all the companies that are linked to these activities in dollars outside the payment system, therefore all the activities on oil and natural gas”explains Natalie Jansonteacher-researcher at Neoma Business School. Swift is the most popular system, but there are others. The Russian bank has even created its network.