ABSTRACT
This chapter analyzes the emergence of regional powers in the international financial system and to consider their presence in the future world. It focuses on foreign reserves, because by their accumulation regional powers began to play an important role in the international financial system. The chapter talks about the comparison between the mechanisms of foreign reserve accumulation before the global financial crisis in China, Russia and India. It discusses that in China and Russia a continuing large current account surplus was the main source of inflow of foreign currencies that tremendously increased foreign reserves. This chapter explains the cause of net lending in China's firm and Russia's government sectors by the current account surplus earned by firms and the government, respectively. It explores that over savings in emerging economies led to low interest rates in the world, which in turn stimulated over investment in developed economies, including the United States.
