Geopolitics has moved from the margins to the very core of global finance. What once appeared as isolated shocks has now become a structural reality. Strategic rivalry between the United States and China, the weaponization of sanctions, and the rise of fragmented payment and digital currency infrastructures are redefining how money flows, how reserves are managed, and how stability is maintained in international markets.
This new Bank & Finance Deep-Dive Report explores how these dynamics create financial fragmentation in a world that remains interconnected yet increasingly contested. Unlike the Cold War, today’s fragmentation is partial but persistent. The U.S. dollar continues to dominate, yet diversification into gold and renminbi is accelerating. Global payment networks still function, yet they are politicized as never before. Sanctions, once targeted, now operate as systemic shocks with spillover effects on both advanced and emerging economies.
The study offers a comprehensive framework to understand these shifts. It reviews historical episodes of financial geopolitics, analyzes current fracture lines, and explains how capital flows and reserve strategies are now shaped as much by political alignment as by macroeconomic fundamentals. It also examines the technological bifurcation of financial infrastructures, the systemic impact of sanctions, and the new vulnerabilities facing emerging markets. Most importantly, it develops three forward-looking scenarios—managed multipolarity, bloc fragmentation, and hybrid integration—that help decision-makers stress-test strategies for the years ahead.
By combining historical insight, empirical data, and scenario planning, the report goes beyond diagnosis. It sets out policy pathways and market responses for sovereigns, central banks, regulators, and institutional investors. It highlights why resilience today requires transparent debt practices, diversified reserves, interoperable infrastructures, and stronger domestic and regional markets.
Why it matters
Financial fragmentation is not a distant risk. It is already here. For governments, it increases the cost of borrowing and the volatility of capital flows. For central banks, it complicates reserve management and payment stability. For investors, it creates alignment risk, legal uncertainty, and rising costs of compliance.
Understanding these dynamics is no longer optional. It is essential. This report provides the tools to anticipate shocks, adapt strategies, and seize opportunities in a fractured global order.
Download the report
Financial Geopolitics and Global Fragmentation
