Financial world as information system

The contemporary world of finances is about information mainly, the data on banks’ clients, insurance companies, pension and investment, as well as other entities dealing in financial business, is to be collected, stored, processed and used. The miscellaneous bits and pieces are brought together from different sources. In case of individuals it all boils down to money, property, work, health, relatives and the living conditions. In case of legal entities the sphere of interest encompasses funds and business dealings, credit history, planned investments, top leaders, shareholders and managers, contracts, companies’ capital funds, etc. These are the things banks and other financial dealers have their own services for. Aside from that, the information structures include credit bureaus, rating and special information agencies. Some banks or firms may create information pools storing the information on clients. Central banks have become powerful information agencies which carry out the functions of banking oversight taking advantage of practically unlimited access to commercial banks data. Moreover, some central banks gather information on their own. For example, the Bank of France monitors manufacturing enterprises under the pretext of the need to perfect its credit policy. Mighty financial and commercial information flows go through payment terminals, which are telecommunications data providing systems. Separate, but closely intertwined and interacted, information systems survey vast amounts of information flows. 

The bulk of banks and financial companies operate their own security services. Formally their mission is to protect the information, which is the property of enterprises. Unofficially many services get additional information about clients and rivals. Naturally it presupposes that they conduct covert activities using special technical equipment and human intelligence (HUMINT). 

The information collected is confidential and requires legal procedures to get access to it. The fact that they acquire confidential information and enjoy significant independence from state brings the banks closer to secret services. Actually the global information surveillance dome is operated by banks and special services together. In fact, the organic merger of Western special services and financial and banking sector has taken place resulting in a giant shady Leviathan with vast financial and information resources to control all aspects of human life. 

SWIFT as global financial and information surveillance «dome» 

I’m sure the abbreviation SWIFT (Society for Worldwide Interbank Financial Telecommunication) is something new for many. It is a member-owned cooperative through which the financial world conducts its business operations. More than 10,000 financial institutions and corporations in 212 countries trust it every day to exchange millions of standardized financial messages. This activity involves the secure exchange of proprietary data while formally ensuring its confidentiality and integrity. From legal point of view it is a joint-stock company made up by banks of different countries. It was founded in 1973 by 240 banks of 15 states to send and receive information about financial transactions in a secure, standardized and reliable environment. The Society has been functioning since 1977. The US dollar is used for the brunt of SWIFT transactions. SWIFT is a cooperative society under Belgian law and it is owned by its member financial institutions. It has offices around the world. SWIFT headquarters, designed by Ricardo Bofill Taller de Arquitectura are in La Hulpe, Belgium, near Brussels. The top governing body is the General Assembly. The decision is taken on the basis of «one share-one vote» majority. The West European and US banks dominate the directors’ board. The United States of America, Germany, Switzerland, France and Great Britain are the leading shareholders and decision makers. The shares are distributed according to the volume of traffic transported. 

Any bank which enjoys the right to conduct international banking operations in compliance with national law can join SWIFT. Since as far back as the end of XX century SWIFT has been unavoidable in case someone wanted to send money to another country. Once the lion’s share of international transactions was done in dollars, all payments went through the accounts opened in US banks, which, in their turn, had Federal Reserve System (FRS) accounts. Thus, being an international body, SWIFT is tied to the FRS, even though the US banks have no controlling stock. The SWIFT servers are situated in the United States and Belgium. By the middle of last decade the Society served 7800 clients in 200 countries. The daily financial flow is 6 trillion. 

SWIFT as FRS and CIA joint venture

In the summer of 2006 SWIFT happened to be in the heat of a juicy scandal caused by the New York Times, the Wall Street Journal and the Los Angeles Times publications. 

That's how the story went. The events of 9/11 gave rise to the idea of putting under control all financial transactions inside the country, especially the transnational ones. Formally the purpose was to prevent funding terrorist organizations. Pretty soon the CIA established contacts with SWIFT to survey payments information coming in and out. The Agency had no legal ground to do so. Even its former employees were not aware of these activities. There was an attempt to somehow justify the operations, so in 2003 the Society for Worldwide Interbank Financial Telecommunication and some US state agencies, the FBI and the CIA included, as well as the FRS (the Federal Reserve System Chairman Alan Greenspan was there), held talks on the issue in Washington. 

The parties agreed to continue the cooperation under the condition Washington would observe some rules. It envisaged that the US would strengthen the control on the part of US Department of Treasury and limit the activities by exclusively financial transactions suspected to have relation to terror funding. The United States promised to keep away from other payments, including those related to tax evasion and drug trafficking. 

At the talks the US put forward an argument that formally SWIFT was not a bank but rather an interbank liaison link. So the access to its data was not in violation of US bank secrecy laws. It is affirmed that the central banks of Great Britain, France, Germany, Italy, Belgium, the Netherlands, Sweden, Switzerland and Japan were informed about the CIA practices. The Central Bank of Russia was not included into the mentioned awareness list… 

In some cases the information of SWIFT and its cooperation with the USA was classified and never left central banks keeping it away from public, government and parliament knowledge (even if aware, they would never let it out). That’s how it was in Great Britain. In the summer of 2006 the Guardian made come into the open a story telling that SWIFT yearly shared the information related to millions of British banks transactions with the CIA. According to the Guardian, the sharing of classified data is a violation of UK and European law (in particular, the European convention on human rights). 

A spokesman for the information commissioner told the Guardian that the privacy issue was being taken «extremely seriously». If the CIA had accessed financial data belonging to European individuals then this was «likely to be a breach of EU data protection legislation», he said, adding that UK data protection laws may also have been breached if British banking transactions had been handed over. The commissioner requested more information from Swift and the Belgium authorities before deciding how to proceed.

The Bank of England, one of the 10 central banks with a place on SWIFT's managing committee, revealed it had told the British government about the programme in 2002. «When we found out we informed the Treasury and passed the relationship over to them,» Peter Rogers of the Bank said. «We also told Swift that they had to speak to the government themselves. It had nothing to do with us. It was a matter of security and not of finance. It was an issue between Swift and the government».

In a written parliamentary answer, Gordon Brown confirmed the government was aware of the arrangement. Citing government policy not to comment on «specific security issues», however, the chancellor refused to say whether measures had been taken to «ensure the privacy of UK citizens who may have had their financial transactions viewed as part of US counter-terrorism investigations in conjunction with SWIFT». He also refused to say whether the Swift programme was «legally reconciled» with Article 8 of the European convention on human rights.

Financial – information «dome» today

Actually we know nothing about the cooperation between SWIFT and US special services. The issue appears to be kept out of media knowledge. I surmise, the odds are high it is still going on. At least, the United States has all it needs to do it (one of two servers is located on US soil). There are many indirect signs that SWIFT, a formally not-state entity, is under strong pressure from Washington. On of recent examples is the expulsion of Iran in 2012. It’s a common agreement the decision was taken under the US pressure. 

Finally, using SWIFT is not the only way to exercise control over international financial flows. The US dollar is the leading international currency. It means all the transactions go through US based accounts, even if legal entities and individuals are situated outside the country. The data is accumulated by commercial banks and the US Federal Reserve System. 

The creation of enormous detailed consolidated information base of the US Treasury Department is nearing the final phase. It will use the information from US banks, insurance companies, pension funds and other financial organizations. By the beginning of 2003 media reported that all the US special services, including the Central Intelligence Agency, the Federal Bureau of Investigation, the National Security Agency and others would get access to this data base to protect security and national interests. 

The accelerated pace of creating the information database to serve the US banksters and special services make other countries look for protection from the obtrusive control exercised by the Big Brother… A lot is said nowadays about the expediency of switching the international transactions from US dollar to other currencies. Normally it is viewed as the way to get away from the financial and economic dependence on the United States. This is a right thing to do because this change will also create an alternative to relying on the information controlled by USA.