Frauds, Para 3.36) clarifies that there is a link between bank frauds and this stressed assets problem: “One of the emerging risk to the financial sector is increasing trends in frauds in commercial banks and financial institutions. During the last five financial years, frauds have increased substantially both in volume and value terms.
These flows combined with Pakistan’s decision to float sovereign bond issues and GDRs for some companies helped to build the reserves significantly that reached record highs of $ billion. Building up of reserves was a decision taken in anticipation of the emerging difficult domestic and external environment. It turns out that this served well in preserving the exceptional shocks Pakistan faced in 2007.