For the financial sector, the late 1970s and early 1980s represented a period of important change. Financial deregulation, which began in the United States and the United Kingdom and then spread to most other economies, did away with many regulations that had placed limits on the financial system. These reforms aimed to increase the proportion of market-based financing and promised to better allocate savings in order to promote growth. This issue of the Review proposes, forty years later, to assess this liberalization. The first two sections are devoted to the differing reasons behind this movement and the forms it took in the main economies, as well as the changes in the behavior of the various economic agents that it led to. A third section deals with financial crises, which have become more frequent, and the new regulations that have been put into place to limit their manifestations and effects. Finally, a fourth section is devoted to the specific impacts of these reforms on international capital flows. Ultimately, each reader will be able to appreciate for themselves the benefits and ravages of liberalization.
The column on financial history is devoted to a new look at the banking crises in France during the Great Depression of the 1930s. Finally, another article proposes reviewing the twin US deficits in the current context of its economy.