A quick breakdown of what SWIFT is and why it matters • Hacker News Board

Re: A quick breakdown of what SWIFT is and why it matters

#171

Post by [deleted] » Fri, Feb 25, 2022, 7:25 PM UTC

nimbius wrote: post #122

aluminum96 wrote: post #93

Earlier quoted context omitted.

> in 2022 sanctions are ... effectively meaningless as most capable, observant countries have managed to sidestep in part or in whole the once dominant US hegemony This is only true to the extent that the US unilaterally imposes sanctions. The proposed sanctions involving SWIFT are multilateral, with the support of the entire EU. That's around double the economic power of the US alone, and roughly half of the entire…

this is an excellent point, one i hadnt considered. SPFS only has 23 banks connected to it as of 2020, so if its to be an alternative Russia would have to consider it as an alterative of last resort. just how strong is it? the consternation im still faced with is "with the support of the entire EU." It may be difficult to secure a resounding vote with the bemoaned sword of Damocles. much heating fuel comes from Russi…

[deleted]

Re: A quick breakdown of what SWIFT is and why it matters

#172

Post by deutschewelle » Fri, Feb 25, 2022, 7:25 PM UTC

I_am_tiberius wrote: post #162

If you are pro SWIFT exclusion of Russia, please like this tweet (or a similar one). https://twitter.com/IchBin_RO/status/1497274721418760193

How will Germany pay for Russian oil if they cannot use SWIFT anymore? I know! Our politicians will simply use whatever financial system that Russia will propose.

It would be even possible to trade a fleet of AMGs for a week of oil if need be. Removing SWIFT would only delay trade between Russia and Germany not hinder it in anyway.

In fact bartering system would produce more efficiencies, a bullet proof AMG G-wagon for instance would fetch more oil than a regular C-class offered to Putin's low ranking officers!

All in all, Ukraine gains nothing from this action, it would only give Putin the political ammunition to sell the narrative that Russia is under attack.

The US certainly stands to gain everything and risk nothing in this region and its puzzling to me why Ukraine would choose this as a hill to die on as if their self sacrifice would move the hearts and minds of NATO officers on some emotional basis

Re: A quick breakdown of what SWIFT is and why it matters

#173

Post by RC_ITR » Fri, Feb 25, 2022, 7:27 PM UTC

TekMol wrote: post #26

I often wonder how money is stored. It can't be just a number on a computer in a bank, right? Otherwise some Russian bank could just increase that number to whatever they like. And say "Look, we own 100 Trillion USD. Now let's go shopping.". So I guess USD needs to be recognized by the US somehow? Could the US simply "void" all USD that are owned by Russia?

USD are ultimately bearer notes, we've just built a bunch of trust-based infrastructure to enable transactions without moving physical currency.

The key feature of this system (and what everyone is ignoring) is bank accounts that x/German bank has at y/Russia bank (this is also the actual means of transaction for SWIFT).

So in your example, 'y bank erroneously says we have $100tn' would actually just mean 'y bank is willing to credit the account of x bank by $100tn.'

If x bank then tried to pay y bank for a separate transaction with those fake $, then y bank is the loser anyway.

EDIT: Put alternatively, 'making up' USD is a near equivalent to making a loan, which is sort of the core thing a bank does anyway.

Re: A quick breakdown of what SWIFT is and why it matters

#174

Post by chiefalchemist » Fri, Feb 25, 2022, 7:28 PM UTC

mupuff1234 wrote: post #94

netsharc wrote: post #66

Earlier quoted context omitted.

Seems like China is fine with taking the oil. And China knows the world won't seriously sanction it...

Yes, but then China can easily squeeze them on the price (being the single big buyer)

True. But it's relative. Even if Russia get 75% of the market price, that's still a solid buck. And since they can control the chaos, they can manipulate price.

So if everyone loses, not just Russia, and relatively The West has more to lose, where is the pain for Russia?

Re: A quick breakdown of what SWIFT is and why it matters

#175

Post by krzyk » Fri, Feb 25, 2022, 7:28 PM UTC

nimbius wrote: post #122

aluminum96 wrote: post #93

Earlier quoted context omitted.

> in 2022 sanctions are ... effectively meaningless as most capable, observant countries have managed to sidestep in part or in whole the once dominant US hegemony This is only true to the extent that the US unilaterally imposes sanctions. The proposed sanctions involving SWIFT are multilateral, with the support of the entire EU. That's around double the economic power of the US alone, and roughly half of the entire…

this is an excellent point, one i hadnt considered. SPFS only has 23 banks connected to it as of 2020, so if its to be an alternative Russia would have to consider it as an alterative of last resort. just how strong is it? the consternation im still faced with is "with the support of the entire EU." It may be difficult to secure a resounding vote with the bemoaned sword of Damocles. much heating fuel comes from Russi…

Winter is coming to an end here. So lack of gas would hit industry more than home heating.

Re: A quick breakdown of what SWIFT is and why it matters

#176

Post by namdnay » Fri, Feb 25, 2022, 7:30 PM UTC

rozab wrote: post #89

sega_sai wrote: post #37

All these sanctions are a bit of the joke when you are dealing with an insane leader in a country without elections and sitting on top of a pile of reserves. And the west is not doing one thing that could actually actually make a difference -- cutting oil and gas export because the west thinks it'll be too expensive for the west. I feel these sanctions are still more of signalling, than actually doing something usefu…

The energy/heating situation in Europe is very tenuous. In the UK most everyone has gas central heating, and energy bills are skyrocketing. This is the most pressing domestic issue in the country right now, far above covid. Johnson is attempting to gain some popularity by putting on a tough face, but there is no chance he can survive if energy prices rise any further. Here a staggering number of people die every wint…

30-50k is just the excess mortality in winter months. Further in the article they estimate the number of people who die whilst having difficulty paying for heating to be 3k, and even that is only a correlation - poorer people die earlier for many different reasons

Re: A quick breakdown of what SWIFT is and why it matters

#177

Post by lxgr » Fri, Feb 25, 2022, 7:31 PM UTC

randyrand wrote: post #151

thomasahle wrote: post #135

Earlier quoted context omitted.

I suppose what OP was arguing is, when bank A transfers to bank B, does bank B check with the Feds that the money from bank A is "real"? And is a transfer from A to B really a transfer from A's account at the Feds to B's? In that case, why would the US have to act "indirectly", threatening bank A not to work with bank B? They could simply deny any transfers to and from bank B's account at the Feds, which would make a…

A Euro/anywhere bank could be a middle man to a russian bank, and hold USD for them.

Yes, but they could not transfer it to many places for them. Non-widely transferrable USD are worth much less than USD on common payment rails.

Re: A quick breakdown of what SWIFT is and why it matters

#178

Post by majormajor » Fri, Feb 25, 2022, 7:32 PM UTC

snovv_crash wrote: post #90

mohanmcgeek wrote: post #46

Earlier quoted context omitted.

> Russian bank could just increase that number to whatever they like. Money is an IOU from the bank. So that's what all banks do. But they'll need assets on the right side of their balance sheet.

Bit what if they didn't, and just changed some numbers in their database?

Other comments are making comparisons to asset bubbles or governmental money-printing, which is rather different than immediate bald-faced fraud on the part of a single actor.

Do you really think it's that easy? That *nobody else involved in the system ever was like "wait, what if someone tries to defraud us?"? That there aren't various levels of checks and methods to prevent such easy, easy things?

That, say, the FDIC in the US is just telling banks "sure, we'll insure your bank accounts, don't bother sending us verification, we trust you!"

Whenever you hear someone complain about onerous reporting requirements or other such business regulations, remember that those things get put in place to catch shit like this.

Re: A quick breakdown of what SWIFT is and why it matters

#179

Post by m2fkxy » Fri, Feb 25, 2022, 7:32 PM UTC

Mountain_Skies wrote: post #145

m2fkxy wrote: post #130

Earlier quoted context omitted.

A reminder that two of Western Europe's militaries are nuclear, which hardly makes them "a joke". You seem to be projecting the state of Germany's military to all European forces, which is... questionable.

The nuclear arsenals of France and the UK are a bit meager relative to Russia and the US. That doesn't mean that they can't inflict a good bit of damage but MAD isn't in play with them unless the US is backing them up with its own nuclear arsenal.

French (and probably British, although I know it less) doctrine is not MAD - it is to incur "unacceptable damages" to an offender. And 500-ish combined warheads sure sounds like it can achieve that.

Re: A quick breakdown of what SWIFT is and why it matters

#180

Post by chiefalchemist » Fri, Feb 25, 2022, 7:33 PM UTC

nwatson wrote: post #38

chiefalchemist wrote: post #18

IDK. In an interconnected global economy my sanction of you hurts you, but it hurts me as well. For example, the higher price of oil is good for Russia and OPEC, but not the rest of us.So where is the pain? Certainly there are things that Russia has that the West needs. In addition, if Russians are generally used to less - and the West isn't - then again where is the pain? After two years of pandemic are most America…

> Per [sic, "pre-"?] invasion Putin was effectively saying "Russia can't trust The West. They're out to get us" ... Biden follows that with "Lookout Vlad...we're gonna put a hurting on Russia." Between those two (in-effect) statements, first from Putin, second from Biden, was Russia's/Putin's invasion of Ukraine. No irony there, just cause and effect.

You've missed it, just like Biden did. If you leave the US media bubble, you find that the US gov ( not the people per se) have a reputation. So now Putin - and others - can say "See. Told ya so." Because he promised anti-Russia and we delivered it.