There is no Alternative: SWIFT as Infrastructure Intermediary in Global Financial Markets

This article explores the changing infrastructural architecture of global finance through the lens of Global Production Networks (GPNs). Financial markets infrastructure (FMI) for international payments and securities trading form the backbone of global finance. However, this FMI is typically hidden from observation, debate, and analysis, partly because international payments
have functioned in broadly the same way for almost 50 years, governed by large global banks and the co-operative Society for Worldwide Interbank Financial Telecommunication (SWIFT). A global monopoly sensitive to geopolitical upheavals, SWIFT is increasingly influential in acting to the benefit of the world’s most powerful financial and political players. Thus, more than a
mere passive facilitator of global economic activity, we argue in this paper that FMI forms a carefully crafted socio-economic system of geo-political relevance, whose core components ‘power’ and ‘embeddedness’ we seek to comprehend with the GPN framework. We introduce SWIFT as a key player in
global FMI and establish a conceptual dialogue between the recently introduced notion of the GPNs of finance and the newly developed idea of the GPNs of financial infrastructure. Incorporating Allen’s (1997) power dimensions, we demonstrate their coexistence and complementarity in their carefully orchestrated, tightly intertwined global organizational arrangements.
We show that SWIFT’s proneness to technological and organizational change threatens to reconfigure long-established actors, processes and relationships in and beyond finance, and argue that this makes an in-depth understanding of FMI vital.