International Finance Review 1

Salient Points

We addressed; just what are foreign reserves and what does it mean to ‘freeze’ them? Foreign reserve dollars get parked at US banks to ‘grease the wheels of commerce.’ Those dollars are earmarked for spending with US businesses. To freeze or confiscate those dollars is in effect to 1) forego trillions of dollars worth of trade with american businesses, 2) hit US banks financially and reputationally and 3) compel depositors to take their dollars elsewhere. The Hard Part.