The U.S. and its Western allies have debated whether to exercise a financial "nuclear option" on Russia over its invasion of Ukraine. This afternoon, the U.S. and its allies have agreed to expel selected Russian banks from SWIFT, a service that expedites financial transactions around the world. Just days ago, there was disagreement among our allies about denying Russian financial institutions to SWIFT because it would impose financial and commercial hardships on our allies. The move comes as Russian forces press toward Kyiv despite stiff and courageous Ukrainian resistance.
While the measure doesn't apply to all Russian banks, it's believed that the ones specifically targeted have a significant role in Russia's military-industrial complex. The White House issued a joint statement, saying in part:
"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 also includes a commitment 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." That will be key in any attempt by Putin to tap Russia's reserves abroad to ease the pain of the sanctions being imposed.
(photo: Russia's Central Bank. Gavrill Grigorov / TASS via Getty)
