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Impact Of The Global Financial Crisis On Developing And Advanced Countries' Reserve Holdings, Nora Derian
Impact Of The Global Financial Crisis On Developing And Advanced Countries' Reserve Holdings, Nora Derian
Financial Analyst
The reserve holdings held by the central bank of a country, and more importantly, the changes in those holdings as a percentage of the country’s Gross Domestic Product, can indicate a lot about the financial health of an economy. In this paper, we examine the cross-sectional differences between emerging and advanced economies’ reserve holdings as well as their variations over time, around the global financial crisis of 2008. It is apparent that countries hold reserves for various reasons, primarily for insurance and to attract future investment, and that they are more crucial to emerging economies than developed.