Can Putin Recover From This?
The EU Commission announced this afternoon that the European Central Bank will deploy its most powerful financial weapon against Russian aggression. Several hours later, Secretary of State Antony Blinken announced that the Federal Reserve will impose sanctions of its own upon the Russian central bank.
Central-bank sanctions are a weapon so devastating, in fact, that the only question is whether they might do more damage than Western governments might wish. They could potentially bankrupt the entire Russian banking system and push the ruble into worthlessness.
[Read our ongoing coverage of the Russian invasion in Ukraine]
Russia is also being hit by a partial cut-off from . SWIFT is a messaging technology based in Belgium that allows banks to talk to one another in secure ways, enabling the safe and sure electronic transmission of funds. SWIFT is not a bank, nor is it exactly a payments system. It is instead a way to guarantee that money moves where it is supposed to go. Countries cut off from SWIFT, as Iran was in 2012, are effectively cast back into the precomputer era—forced to rely on–style pallets of physical cash, to fund their governments and their economies.
