Navigating Global Financial System Fragmentation 2025

Images: Getty Images, Shutterstock Contents Foreword 3 Executive summary 4 Introduction 8 1 Past, present and future of the global financial system 9 1.1 The US dollar’s centrality 10 1.2 Integration of a global system 11 1.3 Use of the financial system for economic statecraft 12 1.4 Multipolarity and pressures for fragmentation 14 2 What are the costs of a fragmented financial system? 16 2.1 Macroeconomic impact 16 2.2 Impact on EMDEs 20 2.3 Impact on financial institutions 22 3 Guardrails to protect the global financial system 25 3.1 Principles to Safeguard the Global Financial System from Fragmentation 25 3.2 Rules of Engagement for Responsible Economic Statecraft 28 3.3 A positive vision for the financial system 31 4 Policy recommendations: A framework for action 32 4.1 Contend with existing financial fragmentation 33 4.2 Resist further system fragmentation 35 4.3 Reform the global financial system 36 4.4 Concluding thoughts 37 Appendix: Key terminology 38 Contributors 39 Endnotes 42 Disclaimer This document is published by the World Economic Forum as a contribution to a project, insight area or interaction. The findings, interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum, nor the entirety of its Members, Partners or other stakeholders.© 2025 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. Navigating Global Financial System Fragmentation 2