The author of this piece, Vasuki Shastry, seems very establishment to be coming to the conclusion he does:
Vasuki Shastry is an Associate Asia Fellow at Chatham House. A former journalist, he had a long career at the International Monetary Fund, Standard Chartered Bank, and Singapore’s central bank. He is the author of Has Asia Lost It? Dynamic Past, Turbulent Future.
From Fortune Magazine, April 21:
In Asia, the size of a country's foreign reserves is a source of pride. No conversation on economics is possible without someone boasting about how large their nation's hoard of foreign currency is.
But the U.S. Treasury gave Asia’s bankers a rude awakening when it cut off access to about half of Russia’s $630 billion in reserves held in foreign banks, an action that should force Asian central bankers to re-evaluate their reserve holding strategy, and how that connects with their country's foreign policy.
Any Asian central banker would likely tell you that the best protection against a potential economic or political crisis is their formidable holdings of foreign reserves—mostly in dollars, but increasingly in the Chinese yuan as well.
Asian countries have the world’s largest holdings of dollar reserves, a legacy of the 1997 Asian financial crisis where policymakers fretted about dollar shortages and free-falling local currencies. In reserve holdings, China towers above them all with a cash pile above $3 trillion but peers in the region have also been formidable accumulators, predominantly in the US dollar. They include Japan ($1.4 trillion), Singapore ($426 billion), India ($604 billion), and Taiwan ($550 billion).
Central bankers regard their foreign reserve holdings to be equivalent to cash-on-hand, withdrawn at a moment’s notice and deployed elsewhere at the press of a button. The U.S. move shows that assumption is wrong....
....MUCH MORE
