Some commenters also raised concerns about the complexity of the Basel II proposal. Yes, the Basel II advanced approaches are complex, but this reflects how complex our largest financial institutions have become. To be effective, risk-management practices have evolved in order to support the increasingly sophisticated services, business practices, and organizational structures of large, internationally active financial institutions.
Intervention can be used, however, to supply liquidity to the foreign exchange markets or to influence the level of foreign exchange reserves. When foreign exchange reserves are not needed A country with a hard currency, such as the US dollar, sterling or the euro, has little need to be concerned about the level of foreign exchange reserves. Their currencies are acceptable across the globe.