However, it is not easy for the United States to cut off the information flow (excluding Swift) of cross-border payment and settlement of funds in a country or region. First of all, it must unilaterally force the country and region to decouple from the US dollar through its own financial sanctions, so that swift lacks a sense of presence in the local financial market. Then, it will continue to upgrade the financial sanctions measures with other allies, and finally force swift to decide to kick out all the important financial institutions in this country and region.
To solve the negative effects of US dollar hegemony, the best way is to accelerate the pace of reform of the international monetary system, that is, to establish a multi currency system. Many people in the banking industry said. Ten years ago, some countries discussed promoting the construction of a multi currency system. However, due to pressure from the United States, this discussion has not made substantive progress. On the contrary, the US dollar hegemony has been increasingly consolidated in recent years. The US dollar shortage caused by the outbreak of the epidemic in March this year has just further enhanced the importance of the US dollar in the global investment and trade settlement monetary system.
It is worth noting that some countries and regions are still carrying out beneficial attempts. Recently, the European Union has reached a 750 billion euro economic recovery plan, which will issue trillions of Euro high-quality and high liquidity bonds with its AAA credit rating to raise funds for the economic recovery plan.
Valentin Marinov, a strategist at Calgary Oriental, believes that the move will promote further separation of global reserve assets from the US dollar, drive asset diversification by increasing high-grade bonds in Europe and other non-U.S. regions, and weaken the hegemony of the US dollar in disguise.
Although some countries have made a lot of efforts, it is still very difficult to really shake the hegemony of the US dollar in view of the strong influence of the United States in the global economic and political field. He said frankly.
Many people think that Swift is a cross-border payment system controlled by the United States and is becoming a tool for the United States to carry out financial sanctions on a global scale. In fact, there is a big misunderstanding. The head of the cross-border business department of the above-mentioned foreign-funded banking institutions pointed out to reporters.
Swift, headquartered in Brussels, Belgium, is a neutral international organization. Its function is to carry out standardized message transmission for financial information transmission among financial institutions, including information transmission between banks and between banks and Payment institutions. Financial data such as payment instructions and information confirmation are completed through swift message.
It is worth noting that swift does not involve in the cross-border transfer of funds in bank accounts, and the settlement of cross-border transfer of relevant funds is mainly completed by payment systems set up by countries themselves. For example, in the United States, chips, the New York Clearing House, is responsible for this work, while in China, the cross-border RMB payment system (CIPS) is responsible for cross-border settlement.
Therefore, the role of swift is more like the telecommunication channel of the international payment system. It must be interconnected with the payment and settlement systems of fund accounts of various countries in order to truly complete the international payment and settlement and form a complete international receipt and payment settlement system. He stressed. In addition, because swift is a cooperative organization jointly owned by global banks, the United States can not directly authorize swift to cut off the payment and settlement information data transmission of all US dollar funds in a certain country or region.
According to the current governance structure of swift, according to the size of message usage in each country, the number of banks in each country on the swift Board shall not exceed 25, and each country shall not exceed 2 banks and 2 representatives. Therefore, Citibank, JPMorgan Chase, Deutsche Bank, BNP Paribas, Lloyds Bank of England and Bank of China all have board seats on the current swift board to represent the interests of swift users in various countries and make decisions on major issues through voting.
A person in charge of global financial market department of European bank, who is familiar with the development process of swift, told reporters that this governance structure also reflects the original intention of swift, that is, to become a neutral organization that provides professional telecommunication services to the widest range of international payment participants without political influence and government intervention, and fully protect the business secrets of its members.
However, due to the strong information channel status of swift in the international payment and settlement system, it is difficult to get rid of the political influence completely. For example, after the outbreak of the 9.11 incident, the United States launched the terrorist funds tracking program (TFTP) according to the international emergency economic power act, authorized the US Treasury Department to track and freeze the terrorist funds flow, and asked swift to provide assistance - stop providing services to the individuals, enterprises and financial institutions listed in the sanctions, but also implemented the swift Conduct investigation.
This makes swift begin to feel the political pressure. Although Swift has been increasingly included in the supervision and management of the group of ten (G10) central banks in recent years, due to some political pressure, it has successively imposed sanctions on financial institutions in North Korea, Iraq, Iran, Libya, Russia, and even de listing all financial institutions in individual countries.
Behind this is that the United States, through its US dollar hegemony and global leadership, forced the central banks and governments of other G10 countries to agree to its economic and financial sanctions against some countries, making swift a helper of a series of US financial sanctions. The person in charge pointed out. It is worth noting that, in view of the strong influence of the United States in the global financial market, the chairman of swift has been basically held by the representatives of the member units of the United States for a long time, resulting in some major decisions of swift more or less reflecting the political intention of the United States.
Although the United States can not directly force swift to cut off all the payment and settlement information data transmission between US dollars and a certain country or region, with its strong US dollar hegemony and international financial market influence, now the United States adopts a series of curve operations, which often forces a country or region to completely decouple from the US dollar in disguise, making swift a decoration in the local area.
In November 2008, the United States launched financial sanctions against Iran under the pretext of nuclear proliferation. First, Irans financial institutions were prohibited from using chips (New York Clearing House interbank payment system) to carry out US dollar transaction settlement, directly cut off Irans use of US dollar and its participation in the US financial trading system, forcing Iran to decouple from the US dollar.
Because chips belongs to the United States own cross-border payment system, the United States forbids Iran to use this system to settle US dollar transactions, and other countries have nothing to say. A foreign bank person familiar with the routine of US financial sanctions pointed out. However, the total amount of cross-border trade and investment in Iran continued to fall, and the cross-border payment and settlement business volume of relevant swift funds continued to shrink.
In 2012, the United States and Europe upgraded financial sanctions against Iran, directly removing four important Iranian banks from the swift system.
At that time, due to the significant reduction in the settlement volume of US dollar cross-border transactions of several Iranian banks, some European central banks also thought that Swift was dispensable to these Iranian banks. In addition, the United States used other means to pressure Europe to agree to upgrade the financial sanctions against Iran, so the United States finally achieved the goal of excluding Iranian banks from swift. He pointed out. Although Iran once returned to swift after signing the nuclear arms reduction agreement, at the end of 2018, the trump government unilaterally announced its withdrawal from the Iranian nuclear weapon reduction treaty, once again excluding Iran from the swift system.
Through a series of operations, in recent years, the United States seems to have found out a alternative operation path to eliminate the swift system in a disguised form in a certain country or region. Because chips in the United States has an absolute dominant position in the global dollar payment and settlement system, the US dollar transaction information submission of swift cannot exist independently from chips. This means that the information business of cross-border payment can not be separated from the cross-border payment and settlement system independent development. Therefore, the United States only needs to exclude a certain country and region from chips and cut off its U.S. dollar business capital flow channel, and swift will become insignificant to this country and region. Then, the United States can calmly contact European countries and jointly drive this country and region out of SWI FTu3002
Behind this, the US dollar hegemony has played a key role in fuelling the flames. This foreign bank personage analyzes to the reporter. As the US dollar accounts for 60% - 65% of the global reserve currency market share and more than 40% of the global trade and investment payment share, the settlement of cross-border trade and investment funds of most countries in the world is monopolized by the US dollar. When a country or region loses its US dollar position due to us financial sanctions, the amount of cross-border trade and investment may drop sharply, which will drag down the domestic economic development and investment The financial market is stable.
In recent years, the United States has begun to increase the three-step financial sanctions measures targeted at US dollar hegemony and the linkage effect of chips-swift. First, through its own financial sanctions act, financial institutions or individual enterprises of the sanctioned countries are forced not to participate in the settlement of US dollar transactions (forcing the country and region to decouple from the US dollar) uff09Secondly, we should encourage other allies to participate in financial sanctions and completely cut off other channels for obtaining foreign currency funds in this country and region, and then pressure UN organizations or swift to implement sanctions to drive the latter out of the swift system.
Taking Russia as an example, after the outbreak of the Ukraine crisis in 2014, the United States United allies directly launched financial sanctions against Russia for several years, including freezing or confiscating the assets of the sanctioned object in the United States, restricting some special trade and financial transactions of Russia, cutting off the channels for the use of the US dollar by the subject of the sanction, and restricting other financial institutions from conducting financial transactions with Russias sanctioned targets Easy, restrict Russian financial institutions to use swift, etc. In order to ensure the expected effect of financial sanctions, the United States also imposed huge fines on any financial institutions that violated the financial sanctions program against Russia, revoked their business licenses, included in the sanctions list, and pursued criminal responsibility.
In view of the fact that the international payment and settlement system serves international trade, the United States also realizes that financial sanctions need to be based on economic sanctions. Therefore, in recent years, before the United States carries out financial sanctions against other countries and regions, it will first introduce corresponding economic sanctions measures, so as to significantly reduce the scale of economic and trade exchanges and financial transactions between the world and the sanctioned country and region, and then cut off the latters connection with the US dollars receipt, payment and settlement, and finally cut off its trade with global financial investment and capital collection and payment Its everything.
Wang Xin, director of the Research Bureau of the peoples Bank of China, previously said that the dollar shortage caused by the outbreak of the epidemic in March once again highlighted the hegemony of the US dollar. After the 2008 financial crisis, the hegemony of the US dollar has been further strengthened. Therefore, the urgency of establishing a multi currency system is becoming more prominent because of the impact of the epidemic.
Counterattack of some countries
For example, after the U.S. financial sanctions have restricted the use of swift, Russia simply built its own financial information exchange system in 2014.
Many European countries also realize that a diversified international monetary system is more beneficial for their own interests and the independence of swift. As early as the end of 2018, Britain, France and Germany once planned to launch the instead system (trade swap support tool) in an attempt to evade the financial sanctions imposed by the United States on Iran and continue to maintain economic exchanges with Iran.
In recent years, Singapore is actively trying to use blockchain technology to build a new international payment and settlement system.
However, the effect of these attempts seems to be unsatisfactory. For example, under the pressure of the United States and the low economic scale and cross-border trade volume of Iran, the effect of the instead system is not high, so that the trade volume between Europe and Iran is still low.
According to Peter tchir, director of macro strategy at academies securities, it is quite difficult for a country to build and manage a set of payment and payment telecommunications system that can cover the world, widely connect and efficiently serve a large number of users. First, it must establish a unified interface standard for the transmission of cross-border payment data information of various financial institutions around the world, and secondly, it must connect cross-border payments of various countries Payment system to achieve information flow, capital flow perfect docking.
More importantly, many large-scale transnational financial institutions may not be able to participate in the telecommunication operation system of cross-border fund collection and payment constructed by some countries because of the financial sanctions of the United States, which leads to some operational difficulties in the settlement of cross-border trade and investment funds in this country, making the former appear to be inefficient. He pointed out.
At the same time, many countries which are subject to financial sanctions from the United States also realize that one of the important purposes of the United States to exclude them from swift is to make them unable to obtain US dollars, and to obtain economic and trade development space by virtue of the wide application of the US dollar in the world. Therefore, they simply find a new way to create another picture of economic and trade development by removing the US dollar.
Since 2018, Russia has started de dollarization in an all-round way, making a substantial adjustment in the asset structure of foreign exchange reserves - selling US dollar assets on a large scale and increasing its holdings of gold and other non US currency assets. At the same time, in recent years, Russia has continued to increase the proportion of non US currency settlement in oil, military industry and other export trade.
Rosneft, Russias largest oil producer, has made it clear that it has changed the default settlement currency for all exported crude oil and refined oil to the euro.
According to the data obtained by the reporter, in November 2017, the scale of US Treasury bonds held by Russia was as high as US $105.7 billion, and 20 months later, the value dropped sharply to US $10 billion. According to the data released by the Russian central bank at the end of 2019, the US dollar share of Russias foreign exchange reserves has decreased from 43.7% to 23.6% from March 2018 to March 2019.
Behind this, Russia is deeply aware that, under the dual pressure of US economic repression and financial sanctions, if we continue to implement the dollarization strategy, it will be easy for the United States to seize its own economic lifeline, causing endless hidden dangers to its own economic development and financial market stability. Jet? Me legras, strategic analyst at axiom alternative investments, told reporters. At the end of 2014, an important reason for the success of international speculative capital in short selling the Russian Ruble was that the proportion of US dollar assets in Russias foreign exchange reserves was relatively high at that time. Under the circumstances of a large number of US dollar outflows and the scale of foreign exchange reserves plummeted due to financial sanctions taken by the United States, Russia was once hard to resist. Today, Russia has found that after completing a series of de dollarization operations, it is very difficult for international speculative capital to make waves again with the impact of this years epidemic, because Russias dependence on the US dollar has dropped sharply, making it impossible for them to speculate on the theme of US dollar capital outflow and sell short rubles to gain profits.
It is worth noting that a series of de dollarization operations in Russia have also had unexpected effects. From 2017 to 2019, Russias foreign exchange reserves increased by US $33 billion, US $55 billion and US $86 billion (in US dollars, the same below). Even though the impact of this years epidemic led to a decrease in foreign exchange earnings from oil exports, Russias international reserves still increased by about US $20 billion in the first half of the year. In addition, the rubles ability to resist speculative short selling in the market has been significantly enhanced. The reason is that the proportion of gold in Russias foreign exchange reserves has increased significantly. As of the end of June this year, of Russias 569 billion US dollars of foreign exchange reserves, gold assets have reached 130.8 billion US dollars, accounting for about 22.6%.
The biggest advantage of this is that Russia no longer fears that the United States will increase financial sanctions and decouple the US dollar, which will result in a large outflow of US dollar assets, drag down the sharp decline of foreign exchange reserves, and give speculative capital the opportunity to sell short the domestic ruble and undermine the stability of its financial market. Jer? Me legras points out. The deep-seated reason behind this is that Russias economic development is getting rid of the constraints of dollar hegemony.
In his view, Russias above-mentioned practice is worth learning from many emerging market countries. Due to the hegemony of the US dollar, many countries have to rely heavily on the US dollar for economic trade and debt financing. Therefore, the United States can calmly adjust the size of the US dollar supply, making emerging market countries have to bear a heavy debt burden. For example, in order to stimulate the economic recovery of the United States, unlimited QE triggers have been pushed by many emerging market countries to introduce cheap US dollar foreign debt funds to develop their economy, resulting in the increase of domestic debt ratio (foreign debt balance / GDP), debt service ratio (the sum of medium and long-term debt service and short-term foreign debt interest / export income of goods and services) and the proportion of short-term foreign debt in foreign exchange reserves Once the U.S. economy recovers with the help of loose monetary policy, and then tightens QE measures to reduce the supply of US dollars and the exchange rate rises sharply, these emerging market countries will bear greater pressure on US dollar to redeem foreign debts. If we are not careful, we will trigger capital outflow, exchange rate devaluation, financial market turbulence, and the risk of default of national debt payment will increase sharply A vicious circle such as recession.
However, it is not easy for many emerging market countries to get rid of the shackles of dollar hegemony. Valentin Marinov said it. At present, many countries obtain US dollar loan funds from the world bank or IMF, but the relevant provisions stipulate that these countries must repay in US dollars, and make payment settlement through chips system and swift message system of the United States. These countries can only be firmly tied to the wheel of dollar hegemony, leading to the economic development and trade and investment settlement of the whole country by the United States and the United States Yuans far-reaching influence.
Extended reading U.S. stocks fell, technology stocks were thrown violently, Intel dropped 16% and the King returns! Nine years later, gold stands at $1900 again. Dongguan adjusts restrictions on the purchase of commercial housing: real estate certificates can only be traded after three years. Source: 21st century economic report editor in charge: Yang Zeyu_ NF6036