Foreign Affairs From The Anthology: A New Financial Geopolitics?
Explore the Anthology


After the election of Donald Trump to the presidency, there were wide expectations that the market would respond negatively to his unexpected victory. And yet stock markets rose globally and remain up today. Bond markets have not unwound as predicted, and overall, business as usual seems to be the order of the day in global finance. In an age of political turbulence, the financial world, at least, seems rather stable.

Perhaps this is not so surprising. After all, during the 2008 financial crisis, though the turmoil originated in the United States, the U.S. dollar went up, not down, and the euro proved itself to be a less-than-perfect substitute as a number of debt crises rattled the European continent. And although China managed to maneuver the renminbi into the International Monetary Fund’s Special Drawing Rights basket (a synthetic reserve that also includes the U.S. dollar, British pound sterling, Japanese yen, and euro), it’s still not an internationalized currency. Lacking substitutes, the dollar-driven order rumbles on.

This special Foreign Affairs’ anthology examines whether, despite this surface calm, the geopolitics of finance has shifted over the last decade, given the near collapse of the world’s banking systems and the rise of populists and nationalists all eager to change the status quo in one way or another. What might be the fault lines in the financial world that could precipitate another crisis, and possible realignments, in the global monetary order?

Our first two contributions from Jacqueline Best and Sandy Hager highlight risks within the U.S.-led order itself. Best explores the much-trumpeted independence of central banks, which is what makes them so effective in managing financial crises and yet renders them so unpopular in a world awash with populist fervor. Hager, meanwhile, looks at whether there could be alternatives to a dollar-led order. The second two pieces take us across the Atlantic to assess the state of the European financial order. Kathleen McNamara warns of the remarkable fragility of Europe’

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