Under the designation of Financial Liberalization, deregulation sparked the arrival of new products such as CPs and large time deposits with unregulated rates, which nourished the atmosphere of profit-seeking through these “financial technology” products. 2 Financial Liberalization was a gradual process that started in the late 1970s and spanned twenty years.
Around 1986, signs of “financial anomaly” emerged, brought about by the innovations associated with Financial Liberalization. The most notable anomaly was the apparent no-risk arbitrage opportunity for large non-financial corporations. In 1985, banks became allowed to offer large time deposits with no regulation on their rates.