Reserve Bank of Australia (RBA)

Speech by Brad Jones - ABA Conference - 17 June 2026

Brad Jones opened his ABA Conference address by warning that the international financial system, long insulated from geopolitics, now faces a far more perilous risk environment. He traced the evolution from the post‑World War II Bretton Woods order to today’s fragmented landscape, emphasizing that strategic uncertainty is reshaping capital flows, payment rails and sanctions regimes. He highlighted concrete evidence of fragmentation: geopolitically aligned countries are seeing higher foreign‑direct investment, while US‑China capital flows have slowed dramatically. Cross‑border payment initiatives such as China’s CIPS have surged, yet SWIFT remains the backbone for most transactions. Despite talk of a dollar demise, the greenback still underpins roughly 90% of FX trades and reserve holdings. Jones cited historical shocks – the four‑month closure of US and London exchanges in World I, the Bundesbank’s secret bunker, and cyber‑attacks on Estonia (2007) and the United States (2012) – to illustrate how geopolitical events can cripple markets and critical infrastructure. He warned that modern sanctions are proliferating, with over 120 countries imposing them in 2023, and that evasion tactics are becoming increasingly sophisticated. The implication for regulators and financial firms is clear: they must broaden risk frameworks beyond traditional credit and liquidity concerns to include cyber‑security, disinformation, foreign interference and sanctions compliance. Coordinated public‑private efforts and resilient payment architectures will be essential to weather future geopolitical shocks.