Russia has an alternative system to SWIFT. This move to ban Russia from SWIFT will only empower SPFS.
System for Transfer of Financial Messages, SPFS, is an alternative messaging system and a Financial messaging system of the Bank of Russia which handles about a fifth of domestic payments.
The SPFS is the Russian equivalent of SWIFT and was developed by the Central Bank of Russia in 2014 after the United States government threatened to disconnect Russia from the SWIFT system.
In fact, there are plans to integrate the Russian SPFS network with the China-based Cross-Border Inter-Bank Payments System (CBIBPS), while the Russian government is also in talks to expand SPFS to developing countries such as Turkey and Iran.
A Russian disconnect from SWIFT would almost certainly mean Russia would invade Ukraine and gradually bring its economy into the Eurasian Economic Union. With the Ukrainian GDP currently at US$156 billion, it would add another 8% (assuming matters remained stable) to the Russian economy.
That compares to combined annual Russian trade with the EU and United States of about US$226 billion. This means that the risk to the EU in terms of lost Russian trade would be more significant, accounting for about 5% of all EU exports.
Russia has an alternative system to SWIFT. This move to ban Russia from SWIFT will only empower SPFS.
System for Transfer of Financial Messages, SPFS, is an alternative messaging system and a Financial messaging system of the Bank of Russia which handles about a fifth of domestic payments.
The SPFS is the Russian equivalent of SWIFT and was developed by the Central Bank of Russia in 2014 after the United States government threatened to disconnect Russia from the SWIFT system.
In fact, there are plans to integrate the Russian SPFS network with the China-based Cross-Border Inter-Bank Payments System (CBIBPS), while the Russian government is also in talks to expand SPFS to developing countries such as Turkey and Iran.
A Russian disconnect from SWIFT would almost certainly mean Russia would invade Ukraine and gradually bring its economy into the Eurasian Economic Union. With the Ukrainian GDP currently at US$156 billion, it would add another 8% (assuming matters remained stable) to the Russian economy.
That compares to combined annual Russian trade with the EU and United States of about US$226 billion. This means that the risk to the EU in terms of lost Russian trade would be more significant, accounting for about 5% of all EU exports.