Managing geopolitical risk in banking systems: an integrative framework based on a systematic and bibliometric review

Abstract

This study examines how geopolitical risk (GPR) affects the banking sector by influencing financial stability, bank behaviour, risk exposure and organisational decision-making. Evidence remains fragmented across banking, finance and management studies, and this review addresses the gap by synthesising how geopolitical shocks are transmitted to banks and how financial institutions respond through governance, risk management and strategic adaptation. A PRISMA-inspired systematic literature review of 58 peer-reviewed articles (2000–2026) was conducted using Scopus and Google Scholar, with bibliometric profiling, structured content analysis and thematic synthesis. GPR affects banks through financial, institutional, economic and behavioural channels, increasing credit risk, market volatility, capital allocation constraints and systemic fragility. Bank responses depend on governance quality, capital strength and strategic flexibility, while managerial mechanisms and organisational adaptation processes remain underexplored. The framework is inductive and requires empirical validation. Evidence on micro-level managerial responses remains scarce, with only three studies addressing organisational adaptation at the firm level. The findings support bank executives, regulators and policymakers in embedding GPR indicators into enterprise risk management, scenario-based stress testing and governance frameworks. The study advances the GPR literature by developing a multi-level integrative framework that makes the firm-to-bank transmission channel explicit, incorporates four bank risk categories (credit, market, liquidity/funding and operational/cyber) and identifies governance quality and institutional capacity as key moderating mechanisms, a conceptual structure absent from prior narrative reviews in this domain.