Question

What is financial liberalization (financial liberalization)? How is it performed? Describe the relationship between financial crises and financial liberalization. Sample your comments. (Explained in the context of the subject can be given as examples of the world Turkey.)

Answer 1

Financial liberalisation is a process of removal of the government intervention from the financial market and providing with the complete autonomy to the central banks and providing with transparent flow of money without any intervention of the central government to amend the monetary policy.

It is performed by complete autonomy to the central bank and liberalising various restrictive schemes for regulation of financial market.

relationship between financial crisis and financial liberalisation is that when there would be lesser intervention of the government and the economy would be more prone to this financial crisis as the regulation would be lesser and hence the chances of financial crisis would be high.

This can be exampled in the contact of Turkey because there is a high rate of intervention from Central Government in regulation of currency market which can be seen during the crash of Turkish lira.