In the deglobalized multipolar world, economic, trade, and financial relations previously operating at the global level change, and the fragmentation of the international financial system is not the cause but an inevitable consequence. Central banks and international financial organizations are looking for ways to reduce the risks of this development. There is a need for international cooperation and the reduction of adverse effects through international collaboration, while the active regulatory activities of international financial organizations are limited by geopolitical power blocs.
As a matter of course, this does not mean that the role of such world organizations like the International Monetary Fund, the World Bank, the Bank for International Settlements, or the Basel Committee – just to mention some – is not essential, but in the emerging multipolar world order the power factors prioritize their national and regional interests, defend their sovereignty, what hinders the needed international cohesion of financial regulation.
International financial associations and financial centers can provide this required international financial cohesion. As mentioned, the US could preserve its leading international role, but upon the impact of Brexit, London’s role as an international financial center substantially decreased, which transitionally had a negative effect on the European Union's financial system and its future international role.
In response to the post-Brexit situation, EU authorities and also the EU’s financial centers represented in the EU Roundtable of Financial Centers (a regional chapter of the World Alliance of International Financial Centers) have focused on increasing the EU financial markets’ competitiveness.
The EU Roundtable of Financial Centers is an initiative to promote the creation of a common EU financial market as well as strengthen cooperation and exchange regarding financial services between EU member states. Eleven organizations representing EU financial centers and federations from eight EU member countries signed a Memorandum of Understanding.
We should also mention Frankfurt Main Finance which was founded in 2008 as the voice of the Frankfurt financial center in Germany and the Eurozone. Frankfurt Main Finance has more than 75 members.
The EU's international financial position was also indirectly strengthened by the establishment of the World Alliance of International Financial Centers (WAIFC) in Brussels in 2018, which represents the world's largest financial centers and is tasked with promoting international financial cooperation. We should mention the European Banking Federation and the International Banking Federation (IBFed) as important international financial associations. Their mission is to be a bridge between the monetary, regulatory authorities, and banking communities in the multipolar financial world, to share the best practices, and to try to revitalize global financial cooperation.
An important characteristic and advantage of these organizations is that they are professional, non-political, non-profit financial associations, providing the possibility to work for rebuilding international financial cohesion. The BRICS group is expected to make the global governance system fairer. This statement is considerable since the BRICS nations account for more than 40 percent of the world population and about 26 percent of the global economy.
Having reviewed all these global developments, the role and mission of the Asian Financial Cooperation Association (AFCA) increased significantly. As a result of careful preparation, in May 2017, the organization of our AFCA was established, and the founding general assembly approved the Bylaws of the Association.
The timing of the initiative and the establishment of AFCA was excellent, by that time, the most difficult part of the global financial crisis was over, and the international economic community was striving to restore sustainable economic growth and its safe financing, for this reason, in several parts of the world international regional cooperation agreements have been successfully launched and completed. In this favorable climate, the vision and mission of AFCA: Connectivity, Cooperation, Joint governance, and Shared benefits was well received. A great number of distinguished financial institutions, associations, and banks agreed to establish a common platform for facilitating international and regional financial cooperation.
By this time, there were clouds on the horizon of the global international economic and financial relations, the earlier multilateral world changing for a multipolar one, and with this perspective, AFCA’s role gained a higher importance to promote integration and cooperation and open up new gateways. The successful start and building of AFCA has been strongly supported by the Belt and Road Initiative (BRI), which was launched ten years ago, in 2013. Within AFCA, the advance of the Belt and Road-related work is a major initiator and “bricklayer” of building a solid international financial cooperation network.
Expert Biography
Mr. Janos Müller, a Fellow of the Asian Financial Cooperation Association Think Tankers Committee, started his professional life as a research fellow at the Institute of Economic Sciences. From 1970, he was a manager at the Credit Policy Department of the National Bank of Hungary. In 1972-73, he was an Assistant Professor at the University of Missouri, Columbia, in Comparative Economic Studies. From 1973, he was Head of the Division of Economic Policy, Foreign Trade and Foreign Exchange Regulations in the Ministry of Trade, Later Chief Commercial Counsellor in Stockholm; Chief Representative of MKB Bank for Northern Europe and the Baltic States; Chairman of the Foreign Bankers Association in Sweden. From 1998, he was Executive Director of MKB Bank Ltd (Budapest) and a Member of the Board of Management; Chairman of the Supervisory Board of Convest Banka, Zagreb (Croatia), a subsidiary of MKB Bank. From 2006-2013, he was Chief Adviser Hungarian Banking Association, 2007-2013 European Banking Federation - EBF (Brussels), Chairman of the Communication Committee, member of the Economic and Monetary Affairs Committee. From 2010-2018, he was a Member of the Board of Directors of Bank of China Hungary Ltd.
About AFCA and the AFTTC
Asian Financial Cooperation Association (AFCA) was founded in May 2017. It is the first international financial social organization initiated by China. Asian Financial Cooperation Association Think Tankers Committee (AFTTC) is composed of over a hundred domestic and foreign experts from more than forty countries and regions. With the philosophy of "market location, global perspective, problem orientation, in-depth observation, and smart solution," AFTTC has developed AFCA working papers, Asian Financial Observation, Financial Development Report for the Guangdong-Hong Kong-Macao Greater Bay Area, and other bilingual products, conducted Quarterly Seminars, Annual Forums, and other high-level financial activities, sending a strong Asian message constantly on the international stage.