Recent financial crises, beginning with Mexico in 1994-95, the Asian crisis of 1997-1998, and the crises in Russia, Brazil, and other Latin American countries in 1998-99, illustrate the risks of financial volatility and macroeconomic instability during the process of economic growth and development. They also raise issues regarding the management of risks associated with liberalization and global integration, particularly in financial markets. Concerns about the implications of international capital flows for developing countries have grown with the sharply increased volume of these flows since the late 1980s. Some have argued that emerging markets have been the innocent victims of mercurial global investors, while others have questioned the appropriateness of specific policies in the emerging markets themselves. The essays in this volume provide analysis and evidence on the determinants of currency and banking crises in emerging markets, the specific roles of capital flows and the financial sector, and the appropriateness of various policy responses.