US, EU announce some Russian banks will be disconnected from the SWIFT banking system

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US, EU announce some Russian banks will be disconnected from the SWIFT banking system
Russia's President Vladimir Putin gestures as he speaks during a press conference with his Belarus counterpart, following their talks at the Kremlin in Moscow on February 18, 2022.Photo by SERGEI GUNEYEV/Sputnik/AFP via Getty Images
  • The US, EU, UK, and Canada agreed Saturday to remove select Russian banks from SWIFT.
  • SWIFT is a global financial messaging system, and Saturday's announcement could prove disastrous for Russia.
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Western nations announced Saturday that select Russian banks will be removed from the SWIFT banking system, according to a joint statement that vowed to "collectively ensure that this war is a strategic failure for Putin."

The agreement — struck by the United States, the European Union, Canada, and the United Kingdom — committed to disconnecting "selected Russian banks" from the international payment system.

The agreement also committed to "imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions."

"As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies," the statement said.

Saturday's announcement was a major step from Western nations toward imposing serious damage to Russia's economy in response to its invasion of Ukraine.

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"It will stop them from operating worldwide and effectively block Russian exports and imports," Ursula von der Leyen, the president of the European Commission, said Saturday.

SWIFT, headquartered in Belgium, first launched its messaging services in 1977, allowing banks around the world to communicate about cross-border transactions. Removing Russia from the system could be economically devastating for the nation.

As Insider's Ben Winck previously reported, SWIFT essentially "serves as a massive group chat for the world's financial institutions" and is instrumental for global financial communication. The service links more than 11,000 financial institutions in more than 200 countries and territories, and hosted an average of 42 million messages a day, according to SWIFT.

Saturday's announcement marked a shift in opinion for several nations, including Germany, whose foreign minister said as recently as Friday that she did not believe a ban was the best course of action.

Saturday's statement said the new measures will begin "within the coming days."

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"As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies," the statement said.

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