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]

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 data︂ in three locations: Netherlands, Switzerland, and US. Since 2008/2009, a separation has been made so︃ that European SWIFT transactions are no longer stored (even as backups/mirrors) in the US. SWIFT︄ 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 since︅ 2009, the US has a massive influence over international financial markets. If SWIFT doesn't do︆ what the US demands, the US could in theory pull USD from SWIFT. Things are︇ rarely that dramatic, though.

 

[Wellington]

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