Fragmentation & Realignment in the Global Financial System

The global economic system is undergoing a seismic transformation as the world shifts toward a more fragmented future. Geopolitical tensions, domestic political constraints, and strategic competition among major global powers are threatening decades of economic integration and interdependence.

On the one hand, technological change, particularly the prospect of a networked future of finance (i.e., the “finternet”) and advances in AI, hold promise in more efficiently connecting economic actors. In this context, regulators are faced with the complex challenge of managing the finternet for financial stability without undermining the forces of innovation.

On the other hand, domestic political considerations are shifting the pendulum in the direction of industrial policy and the balkanization of markets, sometimes furthered by the very same technologies. These crosscurrents are reshaping the international financial landscape and prompting regulators to revisit foundational questions.

This session discussed topics related to the dilution of the 20th-century globalization consensus, structural economic fragmentation, changing trade and investment flows, the dynamic role of technological innovation, and the perennial question of USD dollar dominance. Related topics have explored post-election regulatory shifts, AI governance, and trust in the financial system.