The interaction between electronic technology and international banking raises macrolevel challenges that involve a complex mix of finance, law, and policy. This chapter focuses on two broad classes of challenges: systemic risk and sovereignty.2 The first challenge is whether cross-border electronic banking has rendered the international banking system inherently more volatile. Are international banking transactions inherently more risky now than, for example, 20 years ago? In other words, this challenge raises a fundamental systemic public policy concern: To what extent do cross-border electronic banking transactions exacerbate systemic risk?