I’ve not understood how the US government has this much power over foreign financial institutions or governments.
But it sounds as if foreign banks are simply refusing to do business with Americans overseas, rather than comply with such complex disclosures and paperwork.
This reminds me of efforts which have been made, to get banks to stop doing business with gun businesses. It’s as if our government has decided that certain people are to be punished. In this case, Americans living overseas, living and doing business legitimately, are treated as if they have something to hide.
I don't think it is any official or legal power, just intimidation. It is also starting to happen in other countries as well. We are all the property of our respective countries, but the shackels have been put on loosly so far. The will gradually tighten them, but it will be too late.