Historically, periods of high indebtedness have been associated with a rising incidence of default or restructuring of public and private debts. A subtle type of debt restructuring takes the form of “financial repression.” Financial repression includes directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks. financial repression is most successful in liquidating debts when accompanied by a steady dose of inflation. The authors describe some of the regulatory measures and policy actions that characterized the heyday of the financial repression era.