This paper details the evolution of foreign exchange assets in different parts of the developing world, the relative importance of the current vs. the capital accounts as the source of those assets, and discusses some categorizations of sovereign wealth funds (SWFs). Then, it briefly reviews the literature on the determinants of reserve accumulation in developing countries. Then, it develops the analysis of the motives for the accumulation of foreign exchange assets, differentiating between the role played by the current and the capital accounts, and between the structural vs. cyclical determinants of such accounts. Lastly, it analyzes the implications of the analysis for regional financial architectures and it draws some conclusions.
