This paper considers the main elements of the standard pattern of ﬁ nancial liberalization that
has become widely prevalent in developing countries. The theoretical arguments in favour of
such liberalization are considered and critiqued, and the political economy of such measures
is discussed. The problems for developing countries, with respect to ﬁ nancial fragility and the
greater propensity to crisis, as well as the negative deﬂ ationary and developmental effects, are
discussed. It is concluded that there is a strong case for developing countries to ensure that their
own ﬁ nancial systems are adequately regulated with...