David Cameron
David Cameron to press fellow EU leaders to block Russia's access to the Swift system for financial transactionsReuters

The UK government will push the European Union to stop Russia from using the Society for Worldwide Interbank Financial Telecommunication (Swift) transactions system over its military interference in Ukraine, according to a report.

Swift is a secure communications system used by financial institutions when they conduct transactions.

According to Bloomberg, which cited an unnamed official UK source, blocking Russia's financial sector from using Belgium-based Swift will be on the agenda when Prime Minister David Cameron meets other EU leaders in Brussels over the weekend beginning 30 August.

Western governments have imposed a number of sanctions on Russia, such as the curbing of military equipment exports and capital including visa restrictions on wealthy Russians, because of its involvement with separatist rebels in Ukraine.

Russia has been accused of sending arms and personnel to pro-Russian militants fighting against the Ukrainian government. It has now pushed troops and tanks over its border igniting a fresh escalation the West is pondering how to respond to.

A war erupted in Ukraine after the country's corrupt pro-Kremlin President Viktor Yanukovich was ousted in a wave of protests against his efforts to bring Kiev and Moscow closer together, eschewing a proposal for better economic and political ties with the EU.

In response to sanctions, Russia has struck back at the EU by banning food imports from the West.

If Cameron is successful in pushing for a Swift block, it will have a significant impact on the Russian banking sector, which will struggle to move capital in and out of its border because so many institutions across the world use the system.

But it could "carry a longer-term downside," Richard Reid, a research fellow for finance and regulation at the University of Dundee in Scotland, told Bloomberg.

"Namely the likelihood that large chunks of Russian international payments flows would move to much less well-monitored and measured financial channels and thus be beyond sanctions at any future point," he added.

Russia has also anticipated a Swift ban by developing its own version of the system.