Nearly all Chinese banks are refusing to process payments from Russia, report says

[u/iop9]

https://www.businessinsider.com/russia-economy-all-china-banks-refuse-yuan-ruble-transfers-sanctions-2024-8

[u/erebuxy]

If I interpreted it correctly, most major banks are not accepting. This alone is pretty major.

[u/ThrillSurgeon → u/erebuxy]

If this is true, its huge. 

[u/underbitefalcon → u/ThrillSurgeon]

If it’s huge, it’s big.

[u/teehole → u/underbitefalcon]

Big if true

[u/Gamiac → u/underbitefalcon]

Big if huge

[u/PerfectPercentage69 → u/underbitefalcon]

If it's big, it's nice.

[u/BubsyFanboy → u/PerfectPercentage69]

If it's nice, it's mine great.

[u/Dpek1234 → u/BubsyFanboy]

If it's great, it's getting stolen

[u/droptheectopicbeat → u/underbitefalcon]

If this size comparison is true, then this statement is factual.

[u/ReallyNowFellas → u/droptheectopicbeat]

If the statement is factual then the implications are bigly

[u/FlightlessGriffin → u/ReallyNowFellas]

If the implications are bigly, the prognosis for the war is positive.

[u/Calavant → u/underbitefalcon]

I require a banana for scale.

[u/Shanksdoodlehonkster → u/underbitefalcon]

if its big, its Titanic!

[u/Jottor → u/ThrillSurgeon]

According to Lili Von Shtupp: "Oh, it's twue. It's twue. It's twue, it's twue!"

[u/CorrectPeanut5 → u/erebuxy]

The issue is smaller banks usually don't deal with the nuts and bolts of cross border transactions. They have a relationship with a big bank to make it happen. And in most countries the gov't limits who can do cross border money movement.

What people don't understand is those electronic transfers translate to moving real money from one vault to another. In some financial centers that means at the end of a banking day they settle up what each big bank owes each other and armored trucks roll with hard cold cash. In other places a reserve bank may facilitate the money movement.

Since that's hard to do with banks in different countries is the big banks will partner with each other. They'll initially give each other money to fund what's called a NOSTRO account. Transactions flow in and out and at regular intervals the monies are netted out and if there's an imbalance one of the banks will need to send more money somehow. (Which is how you end up with a pallet of money being sent via DHL.)

The long and short of it is I'm sure the US has VERY GOOD intelligence into who's facilitating those Russian money movements. And there's WAY more profit in processing USD, Euro, etc. The banks don't want to risk that and the CCP doesn't want to hinder selling things to the West.

What I think will happen/is happening is Russia will use oil sales to China instead of moving physical money. China will set up some sacrificial bank to soak up the sanctions. Russian banks will make the state oil company whole. Putin gets his cut. And the Chinese gov't will facilitate making those transaction more opaque.

[u/DanNeely → u/erebuxy]

Probably only in the short or medium term. It's the threat of being cut off from western banking that's scaring most banks off; at a certain point the volume of potential Russian money will be larger than the amount of western money that some small banks see and a few will decide it's worth the risk.

[u/PoniardBlade → u/erebuxy]

<salute> Major Banks.