A common legacy of banking crises is a large increase in government debt, as fiscal resources are used to shore up the banking system. Do crisis response strategies that commit more fiscal resources lower the economic costs of crises? Based on evidence from a sample of 40 banking crises we find...

Intro -- Contents -- EXECUTIVE SUMMARY -- I. INTRODUCTION -- II. A BRIEF OVERVIEW OF THEORY -- III. MEASURING FINANCIAL OPENNESS -- IV. PATTERNS OF FINANCIAL GLOBALIZATION -- V. MACROECONOMIC EVIDENCE ON EFFECTS OF FINANCIAL GLOBALIZATION -- VI. HOW DOES THE COMPOSITION OF CAPITAL FLOWS MATTER?...