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THE Keynesian analysis of financial instability as developed by Hyman Minsky provides considerable insights into understanding the nature and dynamics of boom-bust cycles driven by international capital flows in emerging markets. Its main policy conclusion that financial control rather than macroeconomic policy holds the key to financial stability is equally valid. There is, however, a need to develop a new approach to financial control and place greater emphasis on managing capital inflows than has hitherto been the case. ABOUT THE AUTHOR DR YILMAZ AKYÜZ is a former Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD). Contents 1. INTRODUCTION 2. THE KEYNESIAN INSTABILITY HYPOTHESIS AND FINANCIAL CYCLES 3. INVESTMENT AND JOBS OVER THE FINANCIAL CYCLE 4. THE POLICY PROBLEM 5. CAPITAL FLOWS AND COUNTERCYCLICAL MONETARY POLICY 6. RESERVE ACCUMULATION AS SELF-INSURANCE 7. FINANCIAL REGULATIONS, CAPITAL CONTROLS AND RISK MANAGEMENT 8. CONCLUSIONS REFERENCES