Canadian financial institutions face a fragmenting global order shaped by geopolitical rivalry, economic coercion, trade fragmentation, sanctions and growing conflict risks. This report, produced in collaboration with the Global Risk Institute, identifies three interconnected layers of risk:
- Operational: Sanctions compliance, regulatory divergence, cyber threats, data restrictions and dependence on foreign-controlled financial infrastructure;
- Strategic and investment: Exposure to contested markets, including China and other emerging economies, resource nationalism and possible forced divestment; and
- Downstream: Macroeconomic shocks, supply chain disruptions, domestic political instability and escalating geopolitical conflict.
The author concludes that Canadian financial institutions should use exposure mapping, scenario planning, dedicated intelligence capabilities, governance reforms and stress testing to improve resilience and geopolitical risk management.
