The Swift international financial network is seeking to restructure the exclusive US$300 million deal it signed with bankrupt telecommunication services provider Global Crossing Holdings Ltd.
Swift is expected to announce that its deal with Global Crossing will no longer be exclusive, a Global Crossing spokeswoman said Monday. Swift is owned jointly by 7,000 financial institutions in 196 countries and forms the backbone of the international banking money-transfer system. Swift and Global Crossing signed the original deal in February 2001.
Global Crossing attributed Swift's moves to Sept. 11-inspired jitteriness in the banking industry regarding infrastructure failure, and the carrier's own efforts to move from managed services to "core services," according to a Global Crossing statement.
"Increased awareness of the importance of carrier level diversity, particularly following the terrorist attacks on September 11, 2001, prompted SWIFT to pursue a multi-provider solution to provide maximum protection against intrusion or physical infrastructure failure," the Hamilton, Bermuda, carrier said in a statement.
Sources told The Wall Street Journal that Global Crossing's bankruptcy and the ensuing investigation by the U.S. Securities and Exchange Commission (SEC) into its accounting practices were the source of Swift's concerns.
Debt-laden Global Crossing, while still operational, filed for bankruptcy protection in January after overcapacity knocked the bottom out of the long-haul optical data transport market.