Speculators, tax amnesty, and SWIFT

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December 5, 2014 by AK

A follow-up on P.’s speech.

Betters, or speculators, operate in every forex market worth its name. Some traders believe that the Central Bank of Russia (CBR) interferes from time to time to punish market players who bet on outcomes the CBR finds undesirable. (To punish means to inflict losses on in this context.) It seems that the CBR mentioned to Putin the obvious fact that some money managers make bets in forex markets, and Putin found no better than to threaten these pesky “speculators” with retribution in his speech yesterday, stepping into the CBR’s territory and putting into question its independence.

Tax amnesty for repatriated capital? Yeah right, except that – a month before Putin’s proposal – Russia nationalized the best-run, fastest-growing of its large oil companies in a classic example of rule by law, also known as “for our friends, everything; for our enemies, the law.”

On the margins of the speech comes this interview by the CEO of VTB, the country’s second-largest bank. “In my personal view, that [cutting Russia off SWIFT, the global clearing system] would mean war” and the US ambassador should leave Moscow then. I read it as, “we’ll declare war on you if you disconnect us from SWIFT.” That must be the Kremlin’s Plan B.


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