Access to foreign capital is key for private sector and government investment and thus for economic growth in developing countries lacking strong domestic financial systems. But openness brings risks, as the financial crises of the past decade have shown. CGD Senior Fellow Liliana Rojas-Suarez examines the impacts of financial regulations on capital account volatility, as well as mechanisms to further domestic financial deepening in emerging markets to prevent instability and enable growth. The Center’s research also deals with approaches to crisis resolution and the potential of foreign direct investment to promote growth.
