The global nature of financial markets is under a "fair amount" of pressure because regulation is now more national than before, according to the group chief of Standard Chartered.
CEO Bill Winters said the natural response to the global financial crisis from a decade ago was for countries to withdraw into themselves as far as regulation was concerned.
"So, the markets are still very global, corporations are very global, trade is still strong and growing, but the way the markets are regulated is more national than was the case before the crisis," he told CNBC at the annual Singapore Summit.
Despite efforts from central bankers and other regulators to work with each other, it's become "pretty clear" that the flow of money has become fragmented, and that the rise of protectionism and nationalism would further delay the recovery in the global financial system, he added.
As far as trade tensions go, Winters said there has not been any material impact so far, even after the U.S. and China imposed tariffs on $50 billion of each other's goods. Still, the concern remains that the trade spat could escalate and spread beyond just a U.S.-China bilateral issue, which would then have an economic impact, he said.
"I'd say there's a little bit of fear, or lack of confidence, that's causing people to hold back on investments — in particular, investments that would further complicate global supply chains," Winters said.
But the situation could escalate: The U.S. is considering tariffs on $200 billion in Chinese goods for which a public comment period expired earlier this month. President Donald Trump raised the stakes further when he said he's ready to hit China with another $267 billion in tariffs. For its part, Beijing warned that it would retaliate.
The impact of a potential $200 billion worth of tariffs on China would depend on how supply chains adjust, according to Winter. If the global supply chain starts to circumvent the Chinese market altogether because tariffs make it too expensive, then that would "certainly have a knock-on consequence for trade between China and the rest of Asia, given how interlinked the supply chains are between China and its neighbors," he said.
Similar to other business leaders who have voiced their concerns about tariffs, Winters said he hoped that the two countries would be able to settle their dispute through cooperation, rather than confrontation, with basic agreements on establishing the roots of free and fair trade. That said, Winters told CNBC his biggest concern was that the trade dispute was eroding the role of the World Trade Organization.
"As flawed as the WTO framework is, and it is flawed, it needs continual renewal, it is a multilateral framework to resolve exactly the kind of disputes that are being fought through right now," he said.