Prudential measures to address asset market volatility such as risk weights, provisioning, LTV ratios, margin requirements and the build up of foreign currency liabilities in the financial system are also considered as legitimate instruments to respond to destabilising capital flows.   There is greater recognition of the insurance needs of countries.
While it was commonly argued before the crisis that many Asian countries were incurring avoidable costs in accumulating large foreign currency reserves, it has been widely noted that countries with large reserves fared relatively well during the crisis. Forex reserves have provided self-insurance during the global liquidity crisis.