“The pivotal role of the dollar in international trade constitutes a real instrument of the economic domination of the United States in the world”

Grandstand. US President Joe Biden has promised that if Russia invades Ukraine, it will face “serious economic consequences”. Among the measures being considered is the ousting of Moscow from the international financial system known as Swift. But what is Swift? And is it a credible threat? A good idea ? What would be the consequences of such a measure for the global economy?

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The globalization of trade requires the establishment of infrastructures for the communication of financial information. The acronym Swift (Society for Worldwide Interbank Financial Telecommunication) designates a secure international messaging platform, created in 1977 as part of cooperation between Americans and Europeans. The platform is operated by a cooperative society domiciled in Belgium and endowed with international governance, which is supposed to reinforce its neutrality. Russia and China, alongside Americans and Europeans, are represented on the company’s board.

An essential platform for international financial exchanges, it connects more than 11,000 client companies in more than 200 countries, and allows the transfer of trillions of dollars each year.

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The operation of Swift is simple and is based on a particular organization of the financial industry: the banking correspondent. Let’s imagine that a client of a Russian bank wants to pay a debt contracted in dollars with an American company. To make the payment, the Russian bank must have a dollar account with a US bank that acts as correspondent bank. Then, the correspondent bank clears the debt with the US company’s bank, as part of a domestic payment. The Swift network, in this case, simply allows the Russian bank to send the payment order to its correspondent bank in the United States, with the compensation for the debt then being carried out by the American banks.

Any transaction in dollars in the world is therefore ultimately intended to be cleared by American banks. The dollar and its pivotal role in international trade thus constitute a real instrument of the economic domination of the United States in the world.

diplomatic weapon

Swift’s international governance is supposed to guarantee its neutrality vis-à-vis all countries. How then could the United States cut off Russia’s access to the Swift platform?

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