Both drivers, in different ways, point to weaknesses and inefficiencies of the present international monetary system:    –  The accumulation of precautionary reserves is costly, as the return on reserve assets is typically lower than the country’s borrowing costs.
Moreover, even countries holding large a buffer may face constraints in actually using it, if a falling reserve stock is perceived by the market as a negative signal. –  Moreover, if a country accumulates reserves to forestall an overdue exchange rate appreciation it may eventually face substantial capital losses.