The article discusses the impact of short-term capital flows on financial crises. It presents a model showing how borrowing maturity and cost are determined, highlighting the role of self-fulfilling crises. The study finds that a high ratio of short-term debt to reserves predicts financial crises, and more severe crises occur when capital flows reverse. Countries with higher income levels tend to have shorter-term external debt. Trade credit does not significantly influence short-term capital flows. The focus is on preventing potential illiquidity.