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SWIFT’s Customer Security Programme could lead to derisking, although that isn’t its intent.

He is famous for having flagged the wild behavior in debt markets before the Great Financial Crisis of He began his career in as an economist working at the Bank of England. In he joined the Bank of Canada where he spent 22 years and was appointed Deputy Governor in September White discuss a wide range of topics focused primarily on the global financial system. Their conversation begins with a focus on the state of the current system, including a discussion about the consequences of regulatory reform both intended and unintended , as well as endogenous transformation to the system brought about by independent changes in the behavior of banks and other financial participants.

Most of the conversation dealing with possible changes to the International Monetary and Financial System happen during the Episode Overtime, including a discussion about central bank-issued cryptocurrencies, private sector digital money like Libra, and Bitcoin.

The overtime also includes a lengthy discussion about government policy in the face of climate change, and how this relates to the politics of monetary policy.

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William White has spent five decades as a central banker and international financial policymaker, and we are fortunate beneficiaries of the wisdom that he has accrued during these many years. Unilateral, isolated policy making that implicates SWIFT risks hampering the flow of global financial transactions and trade, harming US businesses as well as further antagonizing European allies. SWIFT is the most successful and effective financial messaging system in the world.

It is through this global platform that businesses and banks across jurisdictions are able to benefit from the faster, more effective flow of global finance, trade, and commerce. While these efforts by US legislators continue , they have only taken effect once.

Leading Back Office Systems for Banks

As a result of the sanctions, Iranian oil revenues dropped by nearly half , in part because SWIFT was the key conduit for facilitating such payments. In , following the establishment of the nuclear deal with Iran, the EU delisted many of the disconnected Iranian banks and SWIFT subsequently reconnected them to its network. US legislators and many sanctions watchers across the political spectrum generally view the disconnection of Iranian banks by SWIFT as a contributing factor in bringing Iran to the negotiating table.


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They are keen to draw on this success in other policy contexts. But merely pasting language from one piece of legislation on Iran into an unrelated bill on a different country such as Russia or issue as Congress has a demonstrated propensity for doing carries significant risks and ignores the broader context of the original legislation.

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Specifically, coordinated US-EU sanctions on the Iranian banks which were the basis for the EU council regulation that SWIFT drew its disconnection authority from were a significant contributing component in convincing Iran to negotiate. As the US Congress considers next steps on policy toward Russia and how to effectively block bad actors from global markets, it should be wary of taking unilateral steps to target SWIFT in future legislation.

Sanctions are most effective when they are coordinated, multilateral measures. Imposing unilateral restrictions on SWIFT will certainly have broader ramifications, at least some of which are likely unintended.


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