Synopsis During the last three decades, several countries have moved towards liberalization of their financial systems. This trend towards financial liberalization is part of a broader trend towards reduced direct intervention of the state in the economy. In several LDCs financial liberalization is also a deliberate attempt to move away from "financial repression" as a policy to fund government fiscal imbalances and also subsidized the priority sectors. Moreover powerful changes in information and communication technology have made highly mobile capital a fact of life, but inevitable capital mobility is no argument for unregulated flows as recent experience showed that banks and other financial intermediaries are fragile since their assets are relatively illiquid but their liabilities demandable. This series is dedicated to Raul Prebisch who underlined the dynamics of the world economy and the interdependence between the industrial countries of the North and the LDCs of the South.