In the aftermath of the 1997/1998 crisis, Asian economies have built up large holdings of international reserves. Although initially encouraged to do so by the IMF, more recently they have been criticised for maintaining undervalued currencies, running large current account balance of payments surpluses and accumulating excessive reserves, policies that have been blamed in part for causing global economic imbalances. This paper examines two related issues. The first is the role of closer international macroeconomic policy co-ordination in rectifying the imbalances and the institutional mechanisms through which this may be achieved. The second is the alternative ways in which the liquidity needs of Asian economies may be met without them having to acquire large reserve holdings. There may be an inconsistency in opposing reserve accumulation in Asia and at the same time blocking reform that would provide additional security against subsequent economic and financial crises.