The Russian financial system could survive even if disconnected from the global SWIFT interbank payment system, according to the head of the country’s VTB Bank, Andrey Kostin, Reuters reports.
But Kostin doesn’t think that’s going to happen.
“It would be a very serious measure, ‘unfriendly’ doesn’t do it justice,” he said, per Reuters.
The news comes as Washington and other Western capitals have threatened strong economic repercussions if Russia invades Ukraine.
One of the ideas floated has been cutting off the country from SWIFT, which is important for worldwide money flows.
Russia has assured leaders that it is not planning on an invasion.
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Russia also has its own banking messaging system, SPFS, a SWIFT alternative, which should be able to soften the blow if the SWIFT divorce does happen. And meanwhile, Herman Gref, chief executive of SherBank, a top Russian lender, said it was nonsense that the U.S. could sanction Moscow’s ability to convert payments into other world currencies.
PYMNTS previously reported on the Russia and SWIFT situation, with the sanctions being weighed as a way to deter President Vladimir Putin from attacking Ukraine. There were no decisions made as of the report in early December. The Biden administration was talking with European partners about any potential actions.
Read more: US Could Disconnect Russia from SWIFT Payments to Deter Ukraine Invasion
According to an unnamed senior Biden official, if Russia goes ahead with military force, the U.S. was ready to take actions that could harm the Russian economy. The official said there hadn’t been any specific sanctions considered, but there had been “intensive” talks about what could possibly be done, including going after energy producers and financial institutions or the country’s sovereign debt and oligarchs, making it so they could not travel the same way.
The sanctions might also cut off access to American banking and credit card systems.
As for the SWIFT disconnection, the European Parliament has passed a nonbinding resolution to call for that if the country invades Ukraine.
