International finance and the geopolitics of market infrastructures

Abstract This Article examines how financial market infrastructures (FMIs)—long regarded as neutral, technocratic utilities—have become instruments of geopolitical influence and economic statecraft. Drawing on three case studies—SWIFT (the Society for Worldwide Interbank Financial Telecommunication) sanctions, EU–UK post-Brexit equivalence disputes, and the EU’s withdrawal of FMI recognition for India, South Africa, and the United Arab Emirates—this article shows how FMIs are increasingly ‘weaponized’ as tools of financial diplomacy. It argues that mutual recognition and equivalence regimes, originally designed to foster cross-border regulatory coordination and financial stability, have evolved into levers of jurisdictional power. These mechanisms now serve both ‘offensive’ purposes (such as sanctions) and ‘defensive’ strategies (such as re-shoring euro clearing), revealing their political and discretionary nature. Yet, this transformation is not necessarily a design failure. Rather, it reflects the adaptability of these regimes to a pluralistic international legal order where sovereignty and market access must be balanced. The Article contributes to the literature on international financial governance by analyzing how FMI access decisions sit at the intersection of law, markets, and geopolitics—and by suggesting how these dynamics might reshape global financial integration.