In addition  2  BIS Review 51/2004  to "creaming-off" and foreign borrowing by government, the Bank also borrows foreign currency in its own name mainly through the syndicated loan market, which increases the level of gross reserves.
What is worrying is that the volatility in capital flows has increased significantly in the recent years particularly since 2008 crisis. Capital flows management is therefore one of the biggest challenges for policy makers particularly in emerging and developing economies. Capital flows are a complex phenomenon having both benefits and costs.