Financial crises and the dynamics of financial de-liberalisation

Orkun Saka, Nauro Campos, Paul De Grauwe, Yuemei Ji and Angelo Martelli

Financial crises play a key role in changing existing policies concerning financial markets and institutions. This column provides new evidence for the negative impact of financial crises on the process of financial liberalisation. It also shows, however, that such interventions are only temporary and that the liberalisation process resumes quickly after a crisis. These results support the view that governments use short-term policy reversals as a tool to ease crisis pressures.