•  Policies that preserve price stability in the long term should also ensure stability of the financial system. However, in short term these two objectives might appear to conflict. Even when liquidity in domestic currency is provided to another country, it might find its way back to the domestic economy and contribute to inflationary pressure, if not sterilised.
BIS Review 15/2010  3  •  A buildup of national reserves might itself contribute to systemic instability. A reserve framework requires stability of the reserve currency in order to act as a global store of value and an anchor for price stability. However, the Triffin-dilemma notes that the accumulation of reserves implies persistent current account deficits of the reserve-issuing country.