One is the need for banks and other financial institutions to hold liquid reserves.

Developing countries main defense against world financial instability has been to accumulate international reserves.

Recent financial crises have taught countries that those with large reserves are better able to weather the vicissitudes of international financial markets.

Unfortunately, the recent demonstration of the volatility of global financial markets only encourages the tendency to stockpile reserves.

Africa s natural gas reserves amount to about 8 of global reserves.

Call In the Reserves

A full scale financial crisis is triggered by a sharp fall in the prices of a large set of assets that banks and other financial institutions own, or that make up their borrowers financial reserves.

Latin America will finish 2007 with a current account surplus and growing foreign currency reserves, insulating them from financial crisis.

This will lessen the need felt by emerging economies for self insurance against financial instability, by building up large reserves.

Reserves are like savings accounts.

This diminishes the value of these countries foreign exchange reserves, endangers their fiscal and exchange rate policies, and undermines their financial security.

Certainly, oil reserves are not infinite.

These countries can, of course, resist upward pressure on their currencies by accumulating foreign exchange reserves, like they did before the global financial crisis.

Another apparent advantage is Germany s large financial reserves, which not only cushioned it from the crisis, but also conferred upon it considerable political sway.

Second, countries with large accumulations of dollar reserves will be shifting substantial fractions of those reserves into euros.

Instead, China s reserves mostly underwrite America s debt.

It has 10 of global oil reserves.

They have enough foreign exchange reserves to avoid the risk of financial instability from increasing their domestic spending, as long as they do it prudently.

Covering this drop in reserves more than half of gas reserves and a fifth of oil reserves have been consumed with imports implies an annual cost of more than 300 billion.

Second, China s fiscal surplus, growing foreign exchange reserves, and high savings rate have ensured the financial resources needed to maintain adequate investment and sufficiently rapid growth.

But the fact that so many countries hold large reserves means that the likelihood of the problem spreading into a global financial crisis is greatly reduced.

No wonder, then, that members rely more on their capacity to accumulate reserves than on the Fund s ability to provide opportune, affordable, and reliable financial support.

These reserves are put to better use by assisting the IMF in maintaining an open and stable financial system and prevent crises like these from recurring

We have rich reserves of gas and coal.

For Global Growth and Stability, Mobilize the Reserves

Selling 2 trillion of reserves will take years.

Foreign exchange reserves are an immense 1.9 trillion.

Yes, China does pile up reserves in dollars.

Money put into reserves is income not spent.

The country has significant reserves of natural gas.

We'll have to fall back on our reserves.

Moreover, the ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves.

Consequently, these reserves provided the fuel for economic populism.

Today s big surplus countries do not need large reserves.

OPEC calculates member countries' quotas based on proven reserves.

Most developing countries have accumulated massive foreign currency reserves.

Despite all this, massive excess bank reserves remain unlent.

The parliament reserves the power to make all laws.

Today, however, several (though not all) emerging market countries are benefiting from years of considerable efforts to reduce their financial vulnerability by accumulating huge amounts of international reserves.

Second, complaisant accountants optimistic assumptions about returns on pension reserves, together with large firms greater risk bearing capacity, brightened the financial picture that companies could report to investors.

Many remain convinced that China s government which wields with the world s largest foreign exchange reserves and virtually unchecked authority would be able to prevent a major financial crisis.

Moreover, since the 1997 Asian financial crisis, the region s emerging economies have increased their holdings of foreign exchange reserves, and now possess more than half of the world s total.

Indeed, many developing countries, fearful of losing their economic sovereignty to the IMF as occurred during the 1997 Asian financial crisis accumulated hundreds of billions of dollars in reserves.

Why should emerging market countries central banks undertake this peculiar financial intermediation, which represents a major cost, as the yield of private funds is higher than that of reserves?

Despite such low returns, China has continued to invest its reserves in the US, largely owing to the inability of its own under developed financial market to generate a sufficient supply of safe assets. In the first four months of this year, China added 44.3 billion of US Treasury securities to its reserves, meaning that such debt now accounts for 38 of China s total foreign exchange reserves.