Swift - Question

[wellington]

Something I was never sure on just looking for clarity.

Do ALL SWIFT transactions NOT IN $ transact through the US Banking System?

Ergo, for example a Swift EURO payment from a Japanese Company to a Taiwanese Payment Processor to European Bank/EMI do these pass through the US Financial System, or do they pass through the Euro Central Bank System?

Likewise a KSH Transaction from Kenya travelling to Switzerland is this through the US Banking System?

I ask these questions as i understand Swift is a Belgium company with many shareholders (banks) what I don't understand is how the US has so much sway over the Swift System even when its not in $.

Thanks.

 

[Sols]

Do ALL SWIFT transactions NOT IN $ transact through the US Banking System?

No.

Ergo, for example a Swift EURO payment from a Japanese Company to a Taiwanese Payment Processor to European Bank/EMI do these pass through the US Financial System, or do they pass through the Euro Central Bank System?

Passes through ECB and/or correspondent banks.

Likewise a KSH Transaction from Kenya travelling to Switzerland is this through the US Banking System?

No US involvement.

I ask these questions as i understand Swift is a Belgium company with many shareholders (banks) what I don't understand is how the US has so much sway over the Swift System even when its not in $.

SWIFT is a Belgian company but due to a long and complicated history, it stores data in three locations: Netherlands, Switzerland, and US. Since 2008/2009, a separation has been made so that European SWIFT transactions are no longer stored (even as backups/mirrors) in the US. SWIFT members that are neither US nor European can choose where their data is stored.

While they have accepted not having real-time access to all SWIFT transactions in the world since 2009, the US has a massive influence over international financial markets. If SWIFT doesn't do what the US demands, the US could in theory pull USD from SWIFT. Things are rarely that dramatic, though.

 

[wellington]

No.


Passes through ECB and/or correspondent banks.


No US involvement.


SWIFT is a Belgian company but due to a long and complicated history, it stores data in three locations: Netherlands, Switzerland, and US. Since 2008/2009, a separation has been made so that European SWIFT transactions are no longer stored (even as backups/mirrors) in the US. SWIFT members that are neither US nor European can choose where their data is stored.

While they have accepted not having real-time access to all SWIFT transactions in the world since 2009, the US has a massive influence over international financial markets. If SWIFT doesn't do what the US demands, the US could in theory pull USD from SWIFT. Things are rarely that dramatic, though.

Thanks for clearing this up, it's had me confused for quite some time.