What is Swift?
Swift is the global financial artery that allows the smooth and rapid transfer of money across borders. It stands for Society for Worldwide Interbank Financial Telecommunication.
Created in 1973 and based in Belgium, Swift links 11,000 banks and institutions in more than 200 countries.
Who owns and controls Swift?
Swift was created by American and European banks, which did not want a single institution developing their own system and having a monopoly.
The network is now jointly-owned by more than 2,000 banks and financial institutions.
How would banning Russia from Swift affect it?
Russian companies would lose access to the normal smooth and instant transactions provided by Swift. Payments for its valuable energy and agricultural products would be severely disrupted.
Banks would be likely to have to deal directly with one another, adding delays and extra costs, and ultimately cutting off revenues for the Russian government.
Russia was threatened with a Swift expulsion before – in 2014 when it annexed Crimea. Russia said the move would be tantamount to a declaration of war.
Western allies did not go ahead, but the threat did prompt Russia to develop its own, very fledgling, cross-border transfer system.
To prepare for such a sanction, the Russian government created a National Payment Card System, known as Mir, to process card payments. However, few foreign countries currently use it.
Why is the West divided over Swift?
Removing Russia would hurt companies that supply goods to and buy from Russia, particularly Germany.
Russia is the European Union’s main provider of oil and natural gas, and finding alternative supplies will not be easy. With energy prices already soaring, further disruption is something many governments want to avoid.
There is some pressure from US lawmakers for a ban, but President Joe Biden says his preference is for other sanctions, largely because of the hit to other economies and countries.
And a decision to halt Russia’s access would still need the support from European governments, many of which are reluctant because of the possibility of harming their own economies.