Current financial crisis: the end of financial liberalisation?

The current financial crisis has called the role of the monetary policy into question and has also re-opened the debates about a new regulation and the need of prudential controls of banking activity. This paper argues that the origins of the current crisis can be found in two interrelated elements that have been operating since the decade of the seventies: the financial liberalization policies implemented in developed and developing economies, and the economic policy based on the new consensus in macroeconomics. This new macroeconomic policy was focused on the monetary policy, with the downgrading of fiscal policy, and in the use as a main instrument of the continuous changes in the interest rates in order to control inflation rates. As a result, a huge and unprecedented liquidity and household borrowing has been generated in the main world economies, mainly in the USA and the United Kingdom, that is in the origin on the current crisis.