Financial liberalization is when restrictions on financial markets and financial institutions are eliminated, or when financial innovations such as subprime mortgage loans are introduced to the financial markets. Financial liberations and innovations are beneficial to the economy in the long-run because they lead to more efficient financial markets promoting lending and growth; however, as restrictions are removed and financial liberations and innovations are mismanaged, the freedom can encourage financial institutions to take unnecessary risks going on lending sprees (credit booms) which can lead to financial meltdowns.