The experience with financial crises in emerging market economies suggests a number of government policies that can help make financial crises in emerging market countries less likely,including

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Rapid financial liberalization can actually increase the likelihood of financial crises as it may lead to excessive risk-taking and a lack of oversight. Better bank risk disclosure can help improve transparency and allow investors to make more informed decisions. Limiting currency mismatch can help reduce the vulnerability of the economy to external shocks. Therefore, options B and C are the most appropriate policies to reduce the likelihood of financial crises in emerging market economies.

The Experience with Financial Crises in Emerging Market Economies Suggests