Reserves and their impact on government spending It is sometimes argued that high levels of foreign exchange reserves allow the borrowing country to be less circumspect in assuming debt where they are a good credit risk, as financing is always available. There is a disadvantage here for prudent macroeconomic management.
For the banks, we will have decisions by the end of the year on the capital requirements, new rules and regulations at a global level. We are bound to learn the appropriate lessons and to pave the way for a global financial system which should be much more solid. We cannot afford to have twice the same acute degree of instability.