Andrei Kostin, chief executive of Russia’s second-largest bank VTB, warned Friday that keeping his country from the Swift banking payment system would be tantamount to “war”.
The possibility that Russia might be locked out of Swift has set off alarm bells in Moscow’s financial community as Russia’s banks rely heavily on the Belgium-based payments system for both domestic and international payments.
When the notion first surfaced in 2014, it was shelved as too punitive and only to be considered as a nuclear option.
“If there is no Swift, there is no banking . . . relationship, it means that the countries are on the verge of war, or they are definitely in a cold war,” Kostin noted. “The next day, the Russian and American ambassadors would have to leave the capitals,” he added.
Mr Kostin’s comment indicated a Russian financial class that is increasingly feeling under threat and angered.
"The more you press Russia, I do not think the situation will change. We have already created a domestic alternative to the Swift system . . . and we need to create alternatives internationally."
Kostin further noted that Russia and its neighbor to the east China are currently working together to develop their own platform as an alternative to Swift that would remain outside western influence.
Igor Shuvalov, Russia’s deputy prime minister, echoed this theme. “We are developing our eastern vector,” Mr Shuvalov declared, noting that while Russia’s efforts with China predated the potentially looming Swift crisis, Russia’s ever increasing issues on the international stage certainly put the plan into over-drive.
In fact, “pivot to Asia” is part of Russian leader Vladimir Putin’s foreign policy since the outbreak of the crisis in Ukraine precipitated its international financial difficulties. Deals such as the flagship contract to supply Russian gas to China for 30 years last May worth $400B may be able to blunt the worst economic causalities, though most within Russia still believe a recession is inevitable.