Excluding Russia from global banking’s SWIFT messaging system was always seen as an extreme option to punish President Vladimir Putin for his actions in Ukraine. Some were reluctant to impose it; France’s finance minister called it “the financial nuclear weapon.” Yet on Feb. 26, the U.S. and its allies put aside fears over the potential hit to their own economies and moved to shut a group of Russian lenders out of the network. That left bankers and diplomats racing to grasp the repercussions for everything from energy exports to debt and currency markets.
SWIFT -- the Society for Worldwide Interbank Financial Telecommunication -- is the Gmail of global banking. It delivers secure messages among more than 11,000 financial institutions and companies in over 200 countries and territories, handling trillions of dollars in transactions. The message traffic -- 42 million a day on average last year -- includes orders and confirmations for payments, trades and currency exchanges. A member-owned cooperative, based just outside Brussels, SWIFT was founded in 1973 to end reliance on the telex system.
