In retrospect, the South Korean government seemed to be vaguely aware of the risks of financial liberalization. However, it was not yet ready to handle these risks and the constraints for economic policy imposed by the international capital movements in an interconnected world. The South Korean government prepared several blueprints for financial liberalization and market opening, and put them in action step by step for fear that free capital flow would destabilize the financial sector and hurt the domestic market. But the government still believed that it could manage whatever risks would occur. It stuck to both rigid exchange rate and rigid interest rate policies, and arbitrarily deregulated and regulated the inflow of foreign capital. South Korea became more and more vulnerable to crisis through the 1990s, and it finally struck in 1997.