Russia (bbabo.net), - Systemically important retail banks in Russia (Sberbank, VTB, Otkritie, and others), along with their subsidiaries, have come under US sanctions. The daughters also have retail clients - in the securities market, in insurance, in pensions. What is the economic meaning of sanctions? Banks are being cut off from the dollar, from American financial institutions. Why is this more important for Russian families than the sanctions of Japan or even Switzerland and the UK?

More than 40% of international payments passing through their main center - SWIFT, are denominated in dollars. When companies around the world are exporting, about 75 - 80% of invoices to their counterparties are issued in dollars. At least 50% of cash dollars issued in the United States end up abroad, where they are accumulated, stored, and calculated by them (FRS). In various financial markets of the world, the dollar usually takes up to 20-40% of their volume, in the international reserves of states - about 60% (IMF). It is in the United States that Visa and MasterCard have their residence - these are two key payment card systems for the world (debit, credit). In Russia, their share in the market of card payments is 60 - 70%.

All this is a fact of life. This is how global finance works today, in which the dollar and the euro are the two key reserve currencies, and the US + UK + continental Europe is their core.

What does it mean to "cut off" banks from the dollar, from the US banking system? The answer is to close, forcibly close the correspondent accounts of Russian banks under sanctions and their subsidiaries in American financial institutions, and in the most severe version of the sanctions, to freeze their money in these accounts and other assets. Plus to prohibit any financing of such banks from the USA. You can’t give them loans, you can’t buy their shares, bonds or other debt obligations, you can’t enter into any other financial instruments whose name is a million. You can not have correspondent or any accounts in them.

And what about Russian dollars in European or Asian banks? International settlements in dollars are arranged in such a way that up to 95% of transactions are carried out through clearing in the USA (FRS). This means that these operations must comply with US sanctions laws. If a bank violates it, then it faces billions in fines. European banks have already gone through such fines in the 2000s and 2010s.

Everything is very similar to how it was - and continues to be - with Iranian banks. Only in the case of Iran, sanctions were eventually imposed on the entire banking system of Iran, and any bank from this country was excommunicated from dollars, settlements in them, from Visa and MasterCard. For Russia, sanctions come from the United States - so far only for a select group of major banks. So far, they do not affect small and medium-sized financial institutions, as well as Russian subsidiaries of foreign banks.

And yet - what is really happening with payment cards? Sberbank has 99 million active retail customers, 123 million active debit cards, 15 million active credit cards (2020). Probably in a year - one and a half, there are even more of them. VTB has more than 15 million retail customers (autumn 2021), millions of cards in circulation.

Ruble and currency cards of banks under sanctions, issued with the brand name "Visa" and "Mastercard" continue to operate within Russia. This is what the banks say. Apparently, this will continue to happen, unless Visa and Mastercard suddenly begin to exclude such banks from their clients. The probability of this is quite high. In this case, these banks will not be able to issue new Visa and MasterCard cards. We will all switch to international cards of small and medium-sized banks, to those large institutions that were not under sanctions, to subsidiaries of foreign banks, as well as to Mir cards, looking towards China (UnionPay). Meanwhile, there is an opinion among bankers that valid Visa and Mastercard cards, even if they were issued by banks under sanctions, will work in Russia until their expiration date (due to the peculiarities of the operation of international payment systems in our country). Whether this is true or not, life will show if suddenly an "insured event" occurs.

It is no longer possible to use Visa and Mastercard cards of VTB and other sanctioned banks abroad. The exception is Sberbank. Sberbank cards can work, according to an estimate, until March 26, while it has correspondent accounts in the US (although this possibility may go faster in the US). Cause? The sanctions imposed on Sberbank are somewhat softer. Witnesses confirm that on February 25, Sber cards worked in Europe (Switzerland, Spain, Italy, Germany) and around the world (Dubai, Egypt, Maldives, New Zealand, South Africa, etc.). And even went through the payment in the American online store.

bbabo.Net