LONDON/NEW YORK : A decision by Western allies on Saturday to block"selected" Russian banks from the SWIFT payments system will inflict a crippling economic blow, but also cause much pain to their own companies and banks. And the allies still have room to do more.
But the allies, who also vowed curbs on Russian's central bank to limit its ability to support the rouble, have not yet said which banks would be targeted. That would be crucial to the measure's impact, said sanctions and banking experts. Manchester said the Biden administration had been selective in its sanctions, leaving room to tighten further by blocking more banks and eventually imposing a blanket ban."It is a creeping barrage."The sanctions are likely to hit the rouble hard when markets open on Monday, said Sergey Aleksashenko, a former deputy chairman of the Russian central bank who now lives in the United States, leading to the disappearance of many imports to Russia.
"If it is the banks that are already sanctioned, it doesn't really make a difference. But if it is the top 30 Russian banks then that is an entirely different matter," he said.Previously announced U.S. sanctions against a handful of Russian banks including Sberbank and VTB, took direct aim at the vast majority of about $46 billion worth of daily foreign exchange transactions by Russian financial institutions.
But SPFS, which limits the size of messages and operates only on weekdays, has found it hard to add foreign members.Over the past few days, even as Ukraine urged Western nations to kick Russia off the payments system and was backed by countries such as Britain, others, such as Germany, worried about the possible impact on their economies and companies.
Earlier on Saturday, Germany, which has the EU's biggest trade flows with Russia, softened its stance and suggested it was looking for a way to remove Russia from SWIFT while trying to limit the collateral damage.
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