The global financial system is among the most interconnected and interdependent ecosystems in the world. Global cross-border bank credit stands at nearly $40 trillion, roughly the size of the GDP of the United States, Germany, Japan and India combined. Bond issuances by governments and corporates totalled $9 trillion in 2024, with investors allocating an additional $600 billion to global bond funds. The total value of cross-border payments in 2023 was estimated at more than $190 trillion. For decades, this system has served as the engine for global economic growth through its financing of the real economy. It is composed of an interconnected network of actors, both domestic and international, including central and commercial banks, investment firms and insurers, and regulators, all of which work together to allocate resources, manage risks and provide necessary liquidity. Its functioning promotes growth, stability and integration by moving the funds required for development and commerce, supporting individuals, corporates and governments. Like any social system, it has developed around a common set of rules, principles and norms, both explicit and implicit, that functionally underpin the system’s architecture and establish trust between its actors, allowing firms to conduct business across borders. These elements include respect for property ownership rights, the fundamental rule of law and the independence of fiscal and monetary policy. They have allowed the system to contend with disruptions, both chronic concerns and shocks, the most famous being the global financial crisis. Financial institutions acted together to save the system – such as when the US Federal Reserve used swap lines to provide emergency dollar liquidity to 14 central banks – both out of societal obligation and self-preservation. This understanding, however, is increasingly at risk in a complex geopolitical environment defined by excessive fragmentation, multipolarity and the growing use of geoeconomic statecraft. More and more, states seek to use the global financial system to advance geopolitical objectives. This poses a threat to the very integrity of the system and will have costs at a macroeconomic level as well as for financial institutions, ranging from asset stranding and valuation volatility to reduced liquidity and credit-rating risks. The Navigating Global Financial System Fragmentation initiative convenes more than 25 chief executives, chairpersons and other global finance leaders to reinforce the integrity of the financial system at this moment of rising geopolitical complexity. This report aims to clearly articulate and codify those core rules, principles and norms that can preserve the system while also making the case for the immense opportunity provided by enhanced coordination and integration. The report represents a call to action from the private sector to protect the global financial system’s most essential elements, without undermining national security or sovereignty. By considering these frameworks, policy-makers can establish the necessary conditions for efficient capital markets and enable continued economic growth for decades to come. Navigating Global Financial System Fragmentation January 2025 Foreword Matthew Blake Head, Centre for Financial and Monetary Systems; Member of the Executive Committee, World Economic ForumTed Moynihan Managing Partner, Global Head of Industries, Oliver Wyman (Marsh McLennan) Navigating Global Financial System Fragmentation 3

Navigating Global Financial System Fragmentation 2025