The aftermath of the crisis has triggered a debate on the costs of building up reserves as a self-insurance. We have to acknowledge that their foreign exchange reserves have insulated EMEs from the worst impact of the crisis.
There is an argument that a multilateral option of a pre-arranged line of credit that can be easily and quickly accessed can be a substitute for costly self-insurance. Such a multilateral option is necessary but not sufficient. EMEs need a Plan B and reserves are that Plan B.