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The Challenges of Fragmentation of the International Financial System - Towards a Brave New World Order?

Author

Listed:
  • Janos Muller

    (Hungarian Banking Association, Asian Financial Cooperation Association (AFCA))

  • Adam Kerenyi

    (Centre for Economic and Regional Studies)

Abstract

The emerging new world order will be subject to a number of strong and unexpected effects, transforming and fragmenting the international financial system. The multilateral world economy has come under the influence of a multipolar power structure, triggering geopolitical tensions, which has led to the creation of economic and financial blocs, and the struggle to strengthen power positions. Financial fragmentation poses risks to international financial and monetary stability. Reducing negative impacts requires international cooperation, but the regulatory activities of international financial institutions are constrained by power blocs. This paper seeks to answer the question of how the fragmented world order affects the international monetary system, flows of capital, monetary policies and financial stability.

Suggested Citation

  • Janos Muller & Adam Kerenyi, 2024. "The Challenges of Fragmentation of the International Financial System - Towards a Brave New World Order?," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 23(2), pages 131-155.
    • Handle: RePEc:mnb:finrev:v:23:y:2024:i:2:p:131-155
    as

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    References listed on IDEAS

    as
    1. Daniel McDowell, 2021. "Financial sanctions and political risk in the international currency system," Review of International Political Economy, Taylor & Francis Journals, vol. 28(3), pages 635-661, May.
    2. Peter Halmai, 2023. "Globalisation versus Deglobalisation," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 22(2), pages 5-24.
    3. Stijn Claessens, 2019. "Fragmentation in global financial markets: good or bad for financial stability?," BIS Working Papers 815, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    world order; fragmentation; deglobalisation; integration; central bank digital currency; financial stability;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G1 - Financial Economics - - General Financial Markets
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance

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