The present study seeks to identify the impact of recent and current geopolitical risks and tensions on the existing international financial architecture. Its scope is confined to institutional and legal aspects and does not extend to the dynamics of international relations. The study is structured in three Sections as follows:

Section 1 sets the scene by providing a brief but coherent overview of the international financial architecture, as this has developed since the 1970ies as part of the rules-based international order and the overall international economic governance. 

The following Section 2 discusses the current situation in relation to this architecture through the lens of recent and current geopolitical risks and tensions. It firstly gives a definition of the term “geopolitical risks” (under 2.1) and then focuses on the risks to financial stability in the EU from geopolitical tensions on the occasion of the closure of Sberbank in Europe in February 2022 amidst the Russian invasion of Ukraine, and then on the basis of the recent (since then) and current concerns of public authorities in relation to EU financial stability (under 2.2). Finally (and most importantly), it overviews the sustainability of the international financial architecture, by briefly discussing countries’ compliance with international financial standards in the example of the Basel Committee on Banking Supervision (BCBS), and exploring the potential threats to the maintenance of the existing international financial architecture (under 2.3).

Section 3 concludes by a brief assessment.

Read the entire article here: https://ssrn.com/abstract=5363510 or http://dx.doi.org/10.2139/ssrn.5363510.