Drawing comparisons with the 2008 Lehman Brothers Holdings Inc. failure and the pandemic-related market seizures of March 2020, Pozsar warns that “central banks should stand ready to make markets on Monday again.”
The decision to exclude various Russian lenders from the SWIFT messaging system could result in missed payments and giant overdrafts within the international banking system, and spur monetary authorities to reactivate daily operations to supply the market with dollars.
That’s the view of prominent Credit Suisse Group AG strategist Zoltan Pozsar, who published a note Sunday examining the consequences for money markets of the decision to take some lenders off SWIFT. The system facilitates trillions of dollars of international payments between institutions.
