FX-related prudential measures discriminate by virtue of the currency denomination of the capital transaction, not the residency of the parties to the transaction. These measures are applied to domestic financial institutions, primarily to banks. Limits on banks' open FX position (as a proportion of their capital) are common, as are limits on banks' investments in FX assets. Other measures may seek to limit FX lending by domestic banks, especially to borrowers that lack a natural hedge—including, for example, differential reserve requirements on liabilities in local currency and FX. These types of measures will affect the composition of liabilities, and may also affect the volume of cross border flows to the extent that forcing foreigners to bear the currency risk affects their willingness to lend.