A broad consensus has emerged in the literature that the composition of foreign liabilities - that is, the relative shares of items such as foreign direct investment (FDI), portfolio equity, and external debt in a country’s external finance - is an important determinant of a country’s susceptibility to external crises. Given that liquidity crises are unlikely to be generated by sudden stops in equity flows but have often been triggered by sudden stops in debt flows, large external debt liabilities are usually associated with an increased crisis risk (Cat˜ao and Milesi-Ferretti (2014)). Moreover, the external capital structure of countries is seen as a determinant of economic performance, not least in light of the view that more desirable forms of finance such as FDI are associated with technological transfer.