Another area where IMF research would be value adding will be in creating an informative and exhaustive database on capital flows including cross border bank exposures. This may include standardization of the definition of capital flows, maintaining data at higher frequencies and collecting information on the counterparties involved in the transactions.
Such tracking would help countries determine which types of flows are potentially unstable and need reserve backing. The IMF should undertake an independent study on capital flows based on such data and pinpoint the vulnerabilities, if any, in the international monetary system so as to enable countries to take preventive action against potential pressure points. 24.