World Geostrategic Insights interview with Pascal vander Straeten on the intersection of finance, state power, and geopolitical dynamics, and on how to strengthen the operational resilience of financial infrastructure to address the complexities of the interconnected economic and geopolitical landscape.
Dr. Pascal vander Straeten is an international expert in risk management and geoeconomics who takes a multidisciplinary approach to global financial stability. He focuses on systemic risk, geofinance, and resilience engineering, applying industrial safety models to banking systems. He is the founder and CEO of Value4Risk, a strategic consulting firm with offices in the United States and Australia. Previously, he held leadership roles in the credit and project finance sectors for major banking institutions in financial hubs such as London, New York, and Brussels. He is author of specialized books, including: HRO Strategies for Resilient Risk Management in Banking (2026); An Overture to Geofinance: Global Finance, Geopolitics, and the Wielding of Power (2018); Tail Risk Management: Building a Resilient Financial Business in a Volatile World (2017).
Q1 – Why do you define finance not merely as a market, but as an extension of state power (Financial Statecraft)?
A1 – Finance is not politically neutral. Payment systems, reserve currencies, sanctions, capital markets and access to liquidity are increasingly used as instruments of strategic influence. Financial statecraft reflects the reality that finance has become part of national power projection.
Q2 – How is the current fragmentation among geopolitical blocs redefining the concept of “country risk” for multinational corporations and major banks?
A2 – Country risk can no longer be reduced to macroeconomic indicators. Firms must now assess sanctions exposure, supply chain dependencies, cyber vulnerabilities, political alignment and access to payment infrastructure. Geopolitics is now embedded in financial risk.
Q3 – We are witnessing the freezing of sovereign reserves and the exclusion of entire nations from global payment systems, such as the SWIFT. Do these “financial weapons” risk permanently eroding confidence in the dollar-based system?
A3 – Yes, there is a long term risk. The extensive use of sanctions and reserve freezes may encourage some countries to diversify away from dollar dependency. However, the dollar system remains dominant because of liquidity depth, institutional trust and the absence of a fully credible alternative.
Q4 – How do you assess the effectiveness of Russian (SPFS) or Chinese (CIPS) payment systems in bypassing Western financial hegemony? Are they true alternatives or merely stopgap solutions?
A4 – SPFS and CIPS are important strategic developments, but they are not yet full replacements for the global reach and network effects of SWIFT. They are better understood as partial hedging mechanisms within a more fragmented financial order.
Q5 – You often speak of chokepoints. What are the most vulnerable financial infrastructures today that could be used as geopolitical leverage in the coming years?
A5 -Key chokepoints include cross border payment systems, dollar clearing networks, cloud infrastructure providers, undersea cables, satellite systems and highly concentrated financial data services. Many are efficient, but not necessarily resilient.
Q6 – You are an advocate for applying Resilience Engineering to the banking sector. What is the main limitation of current risk models (such as regulatory stress tests) in predicting “Dragon King” or “Black Swan” events, and what should bankers learn from High-Reliability Organizations (HROs), such as nuclear power or aviation?
A6 – Most traditional risk models are built around historical probabilities and linear assumptions. Dragon King and Black Swan events emerge from complexity, interdependence and cascading failures. Banking can learn from HROs the importance of redundancy, adaptive capacity, decentralized decision making and continuous scenario training.
Q7 – Often the focus is on the need to control price volatility, but you instead emphasize the resilience of physical and digital infrastructure (settlement systems, undersea cables, cloud banking). What is the most underestimated breaking point in the global financial system today?
A7 – One underestimated vulnerability is the concentration of critical financial services within a small number of cloud providers and digital infrastructures. Operational concentration risk may become one of the defining systemic risks of this decade.
Q8 – With the advent of CBDCs (central bank digital currencies) and asset tokenization, will systemic risk decrease due to transparency or increase because of the speed at which potential cyber shocks spread?
A8 – CBDCs and tokenization may improve transparency and traceability, but they could also accelerate contagion dynamics during cyber incidents or crises of confidence. Digital speed can amplify both efficiency and fragility simultaneously.
Q9 – In your book Tail Risk Management, you highlight the importance of the human factor. What skills are Chief Risk Officers (CROs) lacking today to navigate a world where foreign policy and finance are now inseparable?
A9 – Many CROs still lack geopolitical literacy, systems thinking and crisis leadership capabilities. Future risk leaders must understand that financial risk, technological risk and geopolitical risk are now deeply interconnected. They must also think in terms of compound and horizontal risks.
Q10 – If you had to identify a top priority for a risk committee seeking to prepare for a decade of geoeconomic instability, which aspect of resilience should it invest in immediately?
A10 – I would prioritize operational resilience. Institutions should invest in redundancy, cyber resilience, crisis coordination, alternative communication channels and stress testing for geopolitical disruption. Resilience is no longer a compliance exercise. It is becoming a strategic capability.
One broader point I would emphasize is that we are moving from an era of optimization to an era of resilience. For decades, global finance was designed around efficiency, speed and interconnectedness. That model delivered enormous growth, but it also created hidden fragilities and dangerous concentrations of dependency.
Today, geopolitical rivalry, cyber threats, supply chain disruptions and technological fragmentation are forcing institutions to rethink old assumptions. Risk can no longer be treated as a siloed compliance function. It must become a strategic discipline integrated into governance, operations, technology and foreign policy awareness.
The institutions that will thrive in the coming decade will not necessarily be the fastest or the most optimized. They will be the most adaptable, resilient and capable of operating under conditions of uncertainty, disruption and strategic competition.
Dr. Pascal vander Straeten – International expert in risk management and geoeconomics, founder and CEO of Value4Risk.