Will the US and the EU be able to achieve complete financial isolation of Russia?

In the event of "aggression against Ukraine," the United States threatened to financially isolate Russia from the rest of the "civilized world." At the same time, Washington seems to be not ready to fight directly for Kiev, which is not surprising, especially in the recent example of Afghanistan. Instead of the "Third World Nuclear War" there will be an increase in the concentration of NATO troops on our borders and economic blockade from the West. Since the "Ukrainian problem" will still have to be addressed sooner or later, let's see how dire these future anti-Russian sanctions are.

The fact that President Joe Biden threatened his colleague Putin with financial isolation of Russia, said the press secretary of the Russian President Dmitry Peskov:

Yes, indeed, Biden said that if there is this ephemeral invasion of Ukraine - apparently, the Americans themselves have already believed that this is not information stuffing, but the true truth - then Russia will be financially isolated, and so on, and the like.

Victoria Nuland spoke about the same in the US Congress a week earlier:

What we are talking about will in fact be tantamount to complete isolation of Russia from the world financial system with all the consequences that this will entail for Russian business, the inhabitants of Russia, for their opportunities in terms of work, travel, and trade.

It sounds rather unpleasant, especially when it comes to restrictions on foreign travel and work for Russian citizens, which many immediately tried on for themselves. But let's calmly understand what exactly the Americans are threatening us with. Of the real restrictive measures that can be introduced against Russia, experts name the country's disconnection from the SWIFT system, a ban on trading in government debt bonds on the domestic market, sanctions against major Russian banks and the Direct Investment Fund, as well as a ban on free conversion of the ruble into the dollar, and other Western currencies - euros and pounds. Which of these can be applied?

Disconnecting from SWIFT?

We have been intimidated by the disconnection of the Russian financial system from SWIFT since 2014. SWIFT accounts for about 80% of global payments. Although it is technically a “private cooperative” registered in Belgium and subject to European law, all information flows pass through two operations centers, physically located in the United States and the Netherlands, and both have access to the United States Treasury Department. In general, this system is certainly convenient, but transparent for the American authorities. At the same time, there is already a precedent for disconnecting a number of Iranian and DPRK banks from SWIFT.

The threat of being denied access to SWIFT was quite significant in 2014, but now this sanctions train is gone. Since then, Russia has created its own analogue called SPFS (Financial Messaging System). Hundreds of credit and financial organizations and state corporations are already connected to it. Since 2019, the introduction of SPFS in India has begun, work is underway to link it with the Chinese analogue of CIPS and the Iranian SEPAM. In other words, as of the end of 2021, disconnecting Russia from SWIFT will not be a disaster, the financial market will not be paralyzed, and the United States will not be able to achieve complete isolation of our country.

The train, as we noticed, had already left. At the same time, Western partners buying Russian resources for foreign currency can make life difficult for themselves by such a step.

Ban on converting the ruble?

This measure is much more unpleasant and much more realistic. The share of the ruble in international settlements is extremely insignificant, so the West may try to forcibly make the Russian national currency inconvertible. To do this, it will be enough to prohibit American and European banks from exchanging rubles for dollars, euros and pounds sterling with the Central Bank of the Russian Federation and other Russian commercial banks.

This restrictive measure will immediately lead to a massive outflow of foreign investment, sale of assets and further weakening of the ruble. However, Washington and Brussels will not be able to completely “declassify” the Russian national currency. Domestic banks will still be able to purchase dollars and euros through third countries, for example, China. This will lead to a lengthening of the conversion chain and an increase in the cost of the process, but a total financial blockade from the West will not work either.

Rather, Moscow's financial dependence on Beijing will grow, which is hardly in the interests of Washington, which seeks to break this situational alliance between the PRC and the Russian Federation, which is undesirable for the "hegemon".

A ban on public debt transactions?

This is the most realistic sanctions measure, which will be 100% likely to be introduced in the event of "aggression against Ukraine." In the event of a ban on operations with bonds, investors will rapidly sell them, the ruble will weaken, and the Central Bank will have to flood this fire with money.

Thus, in financial terms, Russia will have to pay for the “annexation of Ukraine” with a serious devaluation of the ruble, an increase in the cost of foreign currencies for the acquisition and withdrawal from the domestic market of foreign speculators.
Dear reader, to leave comments on the publication, you must sign in.
  1. Bakht Offline Bakht
    Bakht (Bakhtiyar) 21 December 2021 12: 21
    Of all these measures, the third is the most painful. A ban on public debt transactions. But she's not that dangerous either. The yield on Russian government bonds is from 7 to 8%. By comparison, the yield on US government bonds is below 2%.
    The first two measures are practically feasible, but everyone will suffer damage.
    1. sH, arK Offline sH, arK
      sH, arK 22 December 2021 01: 20
      The ban on the conversion of the ruble is generally complete nonsense! The ruble is converted by the exchange of services and goods through their sale to foreign clients, while they can do this both for their own currency and for rubles - depending on contractual obligations. Yes, it is possible to restrict free conversion or its rate, but this can be done by the government in Russia, and not by an external contractor. In reality, if all trading obligations and contracts are abandoned, then yes, the meaning of the conversion will be lost, but what will happen to the dollar or euro then ?! If it will not be possible to buy oil, gas, grain with it ?!
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 22 December 2021 01: 34
        The conversion of the ruble is indeed the prerogative of the Russian government. And it is long overdue. Nothing terrible will happen inside the country.
        Likewise, nothing terrible will happen to the dollar, or to the euro, or even to the tugrik. As we used to live with a wooden one, so it will be. But there are many more advantages. And I see the main plus in the fact that the export of capital from the country will stop.
        It is high time for the Russian government to attend to this issue.

        Over the past 25 years, $ 750 billion has been withdrawn from Russia to offshores, for which “a better use could be found,” Bloomberg estimated in 2019. Six years earlier, the former head of the Central Bank, Sergei Ignatiev, had given a close assessment. For a quarter of a century, Russian banks have cashed or withdrawn about $ 1 trillion to offshores, he said in 2013.
  2. Bulanov Offline Bulanov
    Bulanov (Vladimir) 21 December 2021 13: 35
    In the event of a ban on operations with bonds, investors will rapidly sell them, the ruble will weaken, and the Central Bank will have to flood this fire with money.

    Will they sell it to anyone, China? Is it good for the West, when will Russia owe China?
  3. Marzhecki Offline Marzhecki
    Marzhecki (Sergei) 21 December 2021 15: 17
    Quote: Bulanov
    Is it good for the West, when will Russia owe China?

    No, it's not profitable. Therefore, options 1 and 2 are less preferable for the US and EU.
  4. Dubravvushkin Offline Dubravvushkin
    Dubravvushkin (Dubravushkin Zhuk) 21 December 2021 17: 56
    What is most important from the above analysis is that the Kremlin states the consequences, but did not say a word about denying the cause of the undesirable consequences, that is, the Kremlin does not deny the plan to seize Ukraine. But what is most important is that the leading force of our society and the media, all the media, I emphasize, do not focus on the possible tragedy for the people of Russia and Ukraine, which the Russian authorities are openly preparing. The publication of a few days ago on a criminal case in the Rostov region, where a major of the RF Armed Forces was tried for giving bribes for the unimpeded supply of military units of the RF Ministry of Defense, stationed in the DPR and LPR in the amount of at least 25 servicemen, which the government even after that brazenly denies, stating still, that we are not there, speaks of everything. Western countries have all the true information about the Russian troops in Donbass and around Donbass, but the Russian government is lying like a gray gelding to "their" people, leading them to the abyss. Our domestic intelligentsia, possessing information about what is happening since 000, has been following the lead of the authorities, but does not lead the people, explaining the hostility of the anti-popular policy of the authorities, which, having bitten their lot, are confident of their impunity. Silence of the people will cost him dearly. This is an axiom.
    1. gorskova.ir Offline gorskova.ir
      gorskova.ir (Irina Gorskova) 21 December 2021 18: 52
      “The authorities do not“ negate. ”It brings order. ....
    2. Marzhecki Offline Marzhecki
      Marzhecki (Sergei) 22 December 2021 08: 15
      And who made a coup in Ukraine, burned people alive in Odessa, suppressed them with tanks in Mariupol?
      Russia too?
    3. Muscool Offline Muscool
      Muscool (Glory) 23 December 2021 13: 37
      According to our media, the miners dug up tanks, warehouses with weapons and ammunition and quickly trained in military affairs and arranged a couple of boilers for the Nazis.
      Interestingly, there were more cases that the rebels would arrange boilers for "any" but full-fledged armies, with military registration and enlistment offices, rear services, headquarters.
      1. alexey alexeyev_2 (Alexey Alekseev) 23 December 2021 17: 57
        There were .. Chechnya It seems like a full-fledged army, the rear of the headquarters and other attributes. But this is how it happened .. Conclusions were made in time. Now such a trick in the Caucasus will not work. Not a single republic In Ukraine, after the Maidan, Bandera thought that they were holding God by the beard. It broke off ... By the way, there were a lot of factories in the Donbass that carried out army orders under the USSR.
  5. gorskova.ir Offline gorskova.ir
    gorskova.ir (Irina Gorskova) 21 December 2021 18: 48
    They can do some damage. Only themselves, I believe, will lose much more. Well, let's say they block our paths to the Western market. And how will they live? Fuel, energy, agricultural products .... From whom does it mainly go there? Let them think about the rest for themselves. If there is still something left. If zL didn’t knock it off at all.
  6. alexey alexeyev_2 (Alexey Alekseev) 23 December 2021 17: 28
    What is it? Where not stick Marzhetsky everywhere with his apocalyptic predictions. Even lie down and die .. New Year's chtol request
  7. Sergei Offline Sergei
    Sergei (Sergei) 27 December 2021 10: 39
    I must say that in the event of an energy blockade of Russia. Russia will impose an energy embargo on NATO countries. That is, more than one tanker, gas carrier going to these countries will not leave the Persian Gulf. We are plugging the Gulf with our cruisers. I think the sanctions will last a week.
  8. BABR1950 Offline BABR1950
    BABR1950 21 January 2022 14: 23
    The US buys 18% of its gas and oil from Russia. They will carry cash dollars by ships, paying for gas and oil and more. Titanium blades for aircraft engines and much more. We can punish and stop selling all this to the USA. 60% of artificial sapphires in the world for iPhones and smartphones are produced in Russia.