AoF-HKIMR Seminar: Financial Implications of Global Fragmentation

30 May 2024


The AoF and the HKIMR jointly hosted a seminar on “Financial Implications of Global Fragmentation” by Dr Rolf Strauch, Chief Economist and Management Board Member from European Stability Mechanism on 30 May 2024. During the seminar, Dr Strauch shared his analysis on the impact of geopolitical fragmentation on capital flows, and to what extent this poses a risk to the euro area’s financial exposures. The results of his study confirmed that geopolitical factors shape financial ties, as investor countries tend to allocate a smaller share of cross-border investments to geopolitically distant partners. He found that an escalation of geopolitical tensions can trigger or perpetuate the ongoing global reallocation of capital. He concluded with a discussion of the policy implications to mitigate the risk of financial fragmentation, and the potential role of Regional Financing Arrangements in this.

The seminar was attended by around 30 participants from academia, government, financial industry and international financial institutions.

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Last revision date: 30 May 2024