Search

The paper is an adapted and revised version of a memorandum that has served as a basis for discussion in several meeting of the Monetary Committee of the European Economic Community. It deals with the interplay of technical banking risks and general economic considerations concerning international foreign reserves. After having considered the temporary character of the recent US agreement proposals, it considers the composition of reserves as a long-term problem. The international monetary system is not the traditional one and although it might look formally unchanged, it is vastly changing everyday. According to the authors, pragmatic decisions on a consistent framework should not be based on security considerations from a banker’s point of view, but rather on considerations of a general economic character. JEL: E42, F15, F33, F36