Security

01:00 AM
Bryan Yurcan
Bryan Yurcan
Slideshows
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

How the Ukraine Crisis Is Affecting the Global Banking Industry

The conflict in Crimea has far-reaching effects on the banking industry.
Previous
1 of 3
Next

 

As the conflict between Russia and Ukraine continues to simmer without a resolution in sight, much of the rest of the world stands on edge. While the immediate threat of large-scale war in Europe is perhaps the most pressing concern, the ancillary fallout from the conflict is far-reaching.

Of course, the crisis is affecting the global banking industry in a number of ways. Perhaps most significantly is how Russia may be allowed to participate in the global financial system. Last week, UK officials said the country would press European Union leaders to exclude Russia from SWIFT, the interbank transaction system headquartered in Belgium.

According to Bloomberg:

"Blocking Russia from the SWIFT system would be a very serious escalation in sanctions against Russia and would most certainly result in equally tough retaliatory actions by Russia," said Chris Weafer, a senior partner at Moscow-based consulting firm Macro Advisory. "An exclusion from SWIFT would not block major trade deals but would cause problems in cross-border banking and that would disrupt trade flows."

The move underscores Europe’s growing concern at Russia’s latest incursion into Ukraine, with casualties mounting amid the threat that conflict descends into an all-out war on the EU’s eastern flank. The U.K. wants the EU to respond by ratcheting up sanctions against Russia to bring them more into alignment with those imposed by the U.S., said the official.

Going through with such a move would have serious implications for Russian banking and commerce. It would follow a similar move made in 2012 when restrictions to SWIFT were used as part of sanctions against Iran.

 

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

Previous
1 of 3
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Byurcan
50%
50%
Byurcan,
User Rank: Author
9/8/2014 | 10:22:03 AM
Re: Russia is not Iran
That's a good point, and perhaps why Russia might have some more leverage than Iran when it comes to standing up to any potential sanctions.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
9/5/2014 | 1:17:01 PM
Re: Russia is not Iran
Russia's economy is so intertwined with tthe rest of Europe because of its energy resources that it will definitely have an impact on European economies that could hurt the already damaged financial system in the EU pretty badly.
Byurcan
50%
50%
Byurcan,
User Rank: Author
9/5/2014 | 9:02:12 AM
Re: Russia is not Iran
You're right, Iran isn't a large player in the world financial stage. Russia, however, has several major banks like Sberbank
Greg MacSweeney
50%
50%
Greg MacSweeney,
User Rank: Author
9/5/2014 | 5:39:51 AM
Russia is not Iran
When SWIFT moved to ban Iran from its payment network, it wasn't that big of a deal. Although large, Iran wasn't a large player in the global financial system. Russia, however, is a bigger player in the financial system. Removing it from SWIFT will certainly be noticed.
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.