The Bank of Italy has published a study tracing the evolution of cross-border financial architecture since the collapse of the Bretton Woods system in 1971, with a focus on the United States and Europe. Covering financial market infrastructures, correspondent banks and custodian banks, the paper finds that nationally fragmented systems developed into an integrated but Western-centric global network that is now facing renewed fragmentation and a potential shift toward a more multipolar structure. The study identifies technology, regulation, economic and political integration, and geopolitics as the main forces shaping this evolution. It treats the global financial crisis as a turning point. Tighter prudential and anti-money laundering and counterterrorist financing requirements contributed to a 30% decline in active correspondent banks between 2011 and 2022, while geopolitical tensions and the use of established infrastructures for sanctions encouraged alternative messaging and payment systems and the consolidation of regional infrastructures. Distributed ledger technology and tokenization could integrate trading, settlement and custody, but may also create closed systems and further fragmentation without common standards. The paper argues that political and strategic alignment is likely to determine interoperability, potentially producing interconnected regional hubs rather than a single global platform. The G20 cross-border payments roadmap and deeper European capital market integration could also shape this emerging architecture.
2026-09-23Bank of Italy
Bank of Italy publishes study on shift toward a fragmented multipolar financial architecture
The Bank of Italy has published a study finding that cross-border financial architecture is shifting from an integrated, Western-centric network toward a more fragmented and multipolar structure. Tighter regulation, declining correspondent banking and geopolitical tensions are driving alternative payment, messaging and regional infrastructure networks. Technology may improve integration, but political alignment is likely to determine how these networks connect.