By Elizabeth Howcroft

LONDON, (Reuters) – The West could use financial sanctions to punish Russia and create parallel systems that hinder globalisation, Fidelity International’s head of asset management said Wednesday.

After Russia invaded Ukraine, February 24, Western countries have placed sanctions to keep Russia out of global markets.

Anne Richards, Fidelity’s chief executive, stated at the City Week London annual event that there had been a “weaponization” of financial sanctions in the previous two-three months.

Richards explained that “the perverse consequence is that in a digital universe it is actually easier to balkanise… than in a physical cash environment.”

“I believe the use sanctions around SWIFT, for example, could actually end up with parallel system, so we have to be careful that, in this globalized world we live in, from a financial service point of view, actually that doesn’t seem like it’s going in reverse.”

Following the Russian invasion of Ukraine, SWIFT was blocked from several Russian banks. Russia called it a “special military operations”.

Russia’s central bank has created an alternative messaging system called “System for Transfer of Financial Messages” (SPFS).

Russia’s central banks said last week that they would not publish the names and addresses of SPFS-related bank accounts.