In the aftermath of the Global Financial Crisis of 2007-2009 (GFC) excessive reserve assets accumulation together with the reliance on few reserve currencies was indicated as one of the weaknesses of the international monetary and financial systems. However, for some countries (mostly Emerging Market Economies) the accumulation of reserve assets was utilised as a unilateral measure of precautionary nature to secure monetary independence in times of crisis. Additionally, reserve assets are considered at the forefront of the resources of the so-called Global Financial Safety Net (GFSN) together with central bank swap and repo lines, funding by regional financing arrangements (RFAs) and international financial institutions. It is this dichotomy of the reserves assets being considered part of the problems that led to the GFC and part of the solutions to prevent and mitigate economic and financial crises on which this project is developed. The project analyses, in particular, the special case of sovereign wealth funds – the different types of these government-owned investment funds. Even though sovereign wealth funds are not part of the GFSN, they are domestic sources of reserves and play an important role in macroeconomic management and global financial stability.

Publications

Lucia Satragno, Monetary Stability as a Common Concern in International Law (Brill | Nijhoff 2022)  https://brill.com/view/title/61775  (Open access available)