Was the recent global financial crisis symptomatic from the challenges of liberalisation of financial markets in Uganda?

Purpose The recent global financial crisis has demonstrated the susceptibility of local economies to the global market system and its idiosyncrasies. While liberalisation of financial markets was initially deemed essential to ease access to cheap capital, it has demonstrated the potential to engender instabilities in the regulatory system. With reference to financial markets regulatory challenges in Uganda, this paper aims to explore how a liberalised market economy can also be exploited to perpetuate corruption and other financial malpractices. Design/methodology/approach This paper explores the challenges to financial markets liberalisation in the absence of effective oversight institutions. Specifically, it draws on experiences of liberalisation of financial markets in Uganda to examine how that country's experience and its antecedents in the wider financial system could have signposted the threat of another financial crisis. Findings While acknowledging the importance of financial markets to development, this paper contends that opening markets should be preceded by tailored requisite reforms locally, to caution local economies against destabilising spontaneous movement of capital in and out of the system. Similarly, a liberalised financial market system and under‐regulation in financial markets can potentially engender a fluid environment inimical to the stability of global markets. Originality/value The paper has examined these issues in the narrow context of the challenges of financial markets liberalisation in Uganda. It will be inferred that the recent global financial crisis should have been foreseen from the earlier antecedents, and economies cautioned against it properly.