A new type of warfare is upon us. In this new mode of war, finance is the most powerful weapon, bullets dare not fire, financial institutions are the targets, and almost everyone is at risk. Instead of smart bombs, improvised explosives, and unmanned drones––economic sanctions, financial restrictions, and cyber programs are the weapons of choice. This is the reality of modern financial warfare.
This Article offers an early examination of this new mode of war. It explores the new financial theater of war, analyzes the modern arsenal of financial weapons, highlights emerging legal tensions, and proposes key recommendations for current and future financial warfare. The Article begins with a general survey of the modern financial infrastructure, the emerging battlefield of modern warfare. Next, it provides a more detailed inventory of the financial weapons of war. It accounts for traditional weapons like economic sanctions, anti-money laundering regulations, and banking restrictions, as well as cyber weapons like distributed denial-of-service attacks, data manipulation hacks, and destructive intrusions. It also explains how these weapons are used in current conflicts with al Qaeda, Iran, ISIS, North Korea, Russia, and Syria. The Article then contends with new tensions relating to financial hostilities, cyberattacks, and non-state actors posed by financial warfare for longstanding legal doctrines. Finally, it recommends innovative cybersecurity incentives, advanced technological stress tests, and comprehensive financial war games as three pragmatic proposals that should be undertaken in response to modern financial warfare while larger issues are still being deliberated by global policymakers. Ultimately, this Article provides an early framework for thinking and acting anew about modern financial warfare and the financial weapons of war.