Today’s world is more economically connected than ever before and is experiencing significant geopolitical fragmentation. In this context, geopolitical risks are among the top three issues that banks must address in the coming years.

Historically, geopolitical risk has often been loosely defined as the additional challenges and opportunities associated with investing in foreign markets, particularly from the perspective of U.S. investors. In my view, this definition is too narrow, as it overlooks the reality that even domestic portfolios can be meaningfully affected by global political and economic shifts.