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

Müller, János and Kerényi, Ádám (2024) The Challenges of Fragmentation of the International Financial System - Towards a Brave New World Order? FINANCIAL AND ECONOMIC REVIEW, 23 (2). pp. 131-155. ISSN 2415-9271 (print); 2415-928X (online)

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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.

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