Russia fears losing access to correspondent accounts abroad

Disconnection of Russia from SWIFT is unlikely, but there is a more serious problem - the loss of access to correspondent accounts abroad, through which Russian banks conduct transactions in foreign currency, said Olga Skorobogatova, the first deputy chairman of the Russian Central Bank, at a roundtable in the State Duma.

"Many times we spoke about this, and SWIFT itself said, we really consider these risks minimal and do not see any serious threat and do not think that it will happen, because the biggest problem, it is not even SWIFT. The problem is that the two banks, Russian and foreign, should keep the correspondent account relations," Interfax quoted Skorobogatova as saying.

"Here all of us also need to work very actively. Because what we have is, SWIFT works, but some foreign bank decides not to work with our Russian bank. And the settlements stop," she explained.

The scenario described by Skorobogatova is possible in the case of tough sanctions against Russian banks. For example, if the U.S. Department of the Treasury blacklists (puts the Russian bank on SDN list) one of Russian banks.

In this case, American credit organizations that hold the accounts of their Russian "colleagues" will be prohibited from doing business with them. And the Russian bank will lose access to dollar payments.

Such measures were repeatedly introduced in the U.S. Congress in 2018 when there were attempts to impose sanctions against the Russian companies Rusal, Renova and their owners billionaires Oleg Deripaska and Viktor Vekselberg.

None of the proposals, however, reached the vote in at least one of the chambers.

As for the SWIFT shutdown, it is not a risk because "no one benefits from it," Roman Chernov, executive director of Russian National SWIFT Association (ROSSWIFT), an association of more than 300 Russian banks and SWIFT members in Russia, said at the same roundtable.

Russia is a major trading partner of Western countries, and without SWIFT it will become impossible to service correspondent accounts abroad, he explained.

As a result, it will be difficult to pay for oil and gas, which account for more than half of Russia's exports. The holders of Russian securities will remain without payments.

"The U.S., which owns quite a large amount of Russian government debt, will not be able to receive payments on it if SWIFT is cut off, that is, it is not viable," Chernov said.

  SWIFT, Russia