ABSTRACT
In the last two decades of the twentieth century there were four major financial crises in the Third World: the 1982 debt crisis (affecting particularly Latin America, with the Chilean economy the worst hit in the region); the 1994 Mexican crisis (and its repercussions throughout Latin America, especially Argentina, commonly known as the ‘Tequila effect’); the 1997 East Asian crisis, and lastly the Brazilian one (in 1999).1 The main common characteristic of these financial crises is that the economies most affected were those that had previously undertaken the most radical processes of financial liberalisation. Furthermore, these countries had not only liberalised their capital accounts and domestic financial sectors, but had done so at a particular time of both high liquidity in international financial markets, and slow growth in most OECD economies; that is, at times when a rapidly growing, highly volatile and largely under-regulated international financial market was anxiously seeking new high-yield investment opportunities.
