Today, Explained Breaking Russia’s banks
Mar 7, 2022
Emily Peck, a Markets reporter for Axios, dives into the significant removal of certain Russian banks from the SWIFT financial system. She discusses SWIFT's critical role in global banking and its historical evolution. The conversation reveals how sanctions have broader social impacts, often affecting everyday citizens more than political elites. Peck also highlights the vulnerabilities of Russian banks and explores the shifts in global economic alliances amidst the sanctions, raising concerns about the future of international finance.
AI Snips
Chapters
Transcript
Episode notes
How SWIFT Works
- SWIFT doesn't actually move money; its messages trigger transfers between institutions.
- Banks use it to confirm transactions, and then they settle the balances later.
Initial SWIFT Inaction
- Initially, the West didn't cut Russia off from SWIFT, focusing on other sanctions.
- However, public outcry and Ukraine's plea changed their minds.
Partial SWIFT Ban
- Seven Russian banks were banned, but major ones tied to energy were spared.
- This is due to Europe's reliance on Russian oil and gas.