SWIFT Change

I’ve long tracked developments in SWIFT, the system that tracks international bank transfers. The NSA got SWIFT to turn over data willingly after 9/11. But then the consortium moved its servers to Europe, making the data legally safer — though surely not technically safer  — from NSA hands. And in spite of the fact that the US negotiated, and then violated the spirit of, a permissive deal to access this information, documents leaked by Edward Snowden still show the NSA double dipping, obtaining SWIFT information via the legal front door and the technical back door.

Nevertheless, it wasn’t the evidence that the US had preferential access to the records of international bank transfers is not what led someone to create a competitor. The threat of sanctions did.

Russia has just announced a plan to have some alternative to SWIFT in place by May.

Russia intends to have its own international inter-bank system up and running by May 2015. The Central of Russia says it needs to speed up preparations for its version of SWIFT in case of possible ”challenges” from the West.

“Given the challenges, Bank of Russia is creating its own system for transmitting financial messaging… It’s time to hurry up, so in the next few months we will have certain work done. The entire project for transmitting financial messages will be completed in May 2015,” said Ramilya Kanafina, deputy head of the national payment system department at the Central Bank of Russia (CBR).

Calls not to use the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system in Russian banks began to grow as relations between Russia and the West deteriorated over sanctions. So far, SWIFT says despite pressure from some Western countries to join the anti-Russian sanctions, it has no intention of doing so.

I’ve long wondered when US reliance on sanctions — which is effectively an assertion of the authority to be able to dictate which economic players are acceptable and not — would begin to undermine the US system. And while this does not seem to be primarily motivated by an effort to undercut US hegemony, except to the degree that Russia refuses to comply with US demands it be permitted to rearrange Russia’s immediate neighborhood. Rather, this is a reaction to US actions.

Nevertheless, it may establish the infrastructure that undermines US hegemony.

9 replies
  1. Anon says:

    Putin has long been pushing for Russia to form its own currency union with borders that would match the old USSR borders. He has also long been pushing for an alternative to the Dollar as the reserve and oil currency. While I have no doubt that this has been encouraged by the sanctions I see this as a continuation of a long strategy.

    • bevin says:

      I’m inclined to disagree: Putin seems to have been pushed, finally, into breaking with the US. The coup in Ukraine-complete with NATO backed Nazi militias and massacres of the civilian population- seems to have finally woken Moscow up to the reality that the only alternative to complete surrender is to fight back.
      There is a good chance that the Iranians will shortly reach the same conclusion when the US puts an end to the current nuclear discussions.
      It is beginning to become clear that Israel’s Sampson option begins with the US sacrificing its hegemonic ambitions by uniting Eurasia-in self defence-against it.
      It is obvious that neither Russia, Iran nor China wants confrontation and each is quite content to repair its weakened economy and shattered society in peace. They now realise that this cannot be: whether they wish it or not they must resist or give in, and resistance means working together against Washington.
      The net result is very likely to be an alliance, including Iran, under a strong nuclear umbrella provided by Russia and China. Lots of fun for warmongers and arms manufacturers and a return, with a vengeance, to MAD. This time there will be no illusions of western goodwill or a shared interest in peaceful co-existence, or of the idea that what the people want, in NATO countries, counts.
      James Petras has an excellent analysis of the state of the game which details the insults and injuries inflicted upon Russia by the US and its allies since 1989.

  2. orionATL says:

    “..And while this does not seem to be primarily motivated by an effort to undercut US hegemony…”

    it does not have to be “motivated”. the day it goes into operation is the day u.s. hegemony drops a notch or two. just as every war – military or economic – the u.s. initiates these days undermines its hegemony. need i add that i’m all for undermining u.s. hegemony, even though it is vastly overestimated, else why would we have lost two wars to hills tribesman?

    russia can do this, why?

    nukes, lads and lassies, nukes. so will we begin to see better russian nukes? rennovations of russian silos and equipment.

    edward snowden may or may not understand that his greatest service to his nation will have been to have initiated the american slide from hegemony.

    america has not been a trusted nation in the world since our totally unwarranted invasion of iraq. that display of presidential/vice presidential hubris and dishonesty and the grotesque societal destruction and torture ensuing has led to, for example, to a recent u.n. critique of our psychological torture of domestic prisoners through the use of extended solitary confinement.

    we will be the better domestically and internationally when our dalliance with hegemony is a thing of the past.

  3. Don Bacon says:

    This is beyond my expertise, but Russia, China and Iran, and the BRICS have advanced banking, currency swap and oil payment plans which would threaten US control of world finances including the “petro-dollar.”
    With China’s support, anything is possible and Obama’s cool reception in Beijing is encouraging.
    The US, unfortunately, can always be counted upon to assist in its own political, military and financial demise.

  4. earlofhuntingdon says:

    The US, with imperial Britain a distant second, is the quintessential power doesn’t share well with others. But continuing to play the game that only US interests count can only encourage others to make pathways around US-controlled bottlenecks that threaten their interests as well as those of many on Main Street.

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