International Reserves and Swap Lines in Times of Financial Distress

Joshua Aizenman

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


This chapter reviews the use of precautionary measures aimed at mitigating emerging markets' exposure to fragility associated with financial integration. The chapter outlines the debate about desirable adjustment of Emerging markets during the first phase of the on-going crisis. It also discusses the experience of the Republic of Korea - a prime example of a country that opted for deeper financial integration in aftermath of the 1997-8 crisis, buffered with large hoarding of international reserves. The chapter suggests as one of a possible way to alleviate sudden stops and deleveraging pressure to use a Pigovian tax-cum-subsidy scheme. The discussion draws possible lessons from the ongoing global liquidity crisis.

Original languageEnglish
Title of host publicationThe Global Financial Crisis and Asia
Subtitle of host publicationImplications and Challenges
PublisherOxford University Press
ISBN (Electronic)9780191748981
ISBN (Print)9780199660957
StatePublished - 24 Jan 2013
Externally publishedYes


  • Emerging markets
  • Financial integration
  • International reserves
  • Pigovian tax-cum-subsidy scheme
  • Policy measures

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)


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