The war in Ukraine. Russia is threatened with being cut off from the SWIFT system. “This is an atomic bomb for the financial markets”

Russia attacked around 4 a.m. on Thursday. Vladimir Putin announced the start of a “military operation” and called on Ukrainian soldiers to lay down their arms. In the first hours, rocket firing was carried out around e.g. Kiev, Odessa and Kharkiv, airports and military bases. Russian troops cross the land borders. Ukraine introduced martial law.

Russian aggression caused a great stir in the Western countries, which announced the use of the strictest. A step that would seriously hit Russia would be to exclude it from the SWIFT system. This scenario could be put into effect in the coming days.

– We will freeze the Russians active in the European Union, we will stop the access of Russian banks to European financial markets – the President of the European Commission Ursula Von der Leyen announced on Thursday at a special press conference, which may mean cutting off from the SWITF system.

The European Union may exclude Russia from the SWIFT banking system. What is that?

The SWIFT system was established in the 1970s as a successor to telex. Today, the system is used by 11,000. global financial institutions for sending secured information and for ordering payments. SWIFT (Society for Worldwide Interbank Financial Telecommunication – Association for Worldwide Interbank Financial Telecommunication) there is no internationally accepted alternative, therefore it is crucial for the financial world.

This system allows you to make financial transfers between banks around the world. BThe failure to use this system would mean that Russian companies or financial institutions would not be able to carry out any transactions. It would be a serious blow to.

– The cut-off from the SWIFT system is an atomic bomb for the financial markets and the banking system – said Dr. Ernest Pytlarczyk, chief economist at Bank Pekao, in an interview with “Wprost”.

Russia’s cut-off from the SWIFT system may cause a serious economic crisis there

Russia’s exclusion from the SWIFT system will be associated with a serious economic crisis for that country. It will be felt not only by Russian banks or private companies. Just as much this the decision will hit large Russian companies and ordinary citizens. Russia will then become a kind of closed area, as it will be financially excluded from all transactions.

Unfortunately, Russia’s exclusion from SWIFT will also affect the West. The lack of financial flows to and from Russia means that also European, Asian and American companies will not be able to fully function. It also means that it will be practically impossible for the West to buy Russian raw materials, including oil or gas.

This would be a big problem for Europe, because transactions only on the line – Russia today are worth 250 billion dollars a year. However, there is no doubt that Russia’s exclusion from the SWIFT system will be much less severe for the countries of the Old Continent. Such a decision in the face of the war in Ukraine seems to be inevitable, according to the words of Ursula Von der Leyen, who announced on Thursday that Russian banks would be blocked from accessing European financial markets and would freeze Russia’s assets in the EU.