This paper introduces a new index, KAOPEN, to measure the extent and intensity of capital controls in cross-border financial transactions. The authors argue that existing measures fail to capture the complexity of capital controls and their effects. KAOPEN is constructed using data from the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), which provides information on the extent and nature of regulations governing external account transactions. The index is based on binary dummy variables that codify the presence of restrictions on cross-border financial transactions. These variables include the presence of multiple exchange rates, restrictions on current account transactions, restrictions on capital account transactions, and the requirement of the surrender of export proceeds. The index is then standardized to reflect the intensity of capital controls, with higher values indicating greater financial openness. The authors compare their index with other measures of financial openness, including the Quinn index and the Miniane index. The correlation between KAOPEN and the Quinn index is found to be 83.9%, suggesting that KAOPEN is a proxy for the intensity of capital controls. The index is also compared with the Miniane index, which is based on more disaggregated AREAER information. The correlation between KAOPEN and the Miniane index is found to be 80.2%. The authors also note that their index is a de jure measure of financial openness, as it attempts to measure regulatory restrictions on capital account transactions, rather than de facto measures based on interest rate parity or arbitrage conditions. The authors find that the world is moving steadily toward greater financial openness, with industrialized countries maintaining high levels of financial openness. Less developed and emerging market countries have slowed their efforts to open financial markets in the 1980s but have accelerated financial opening since the 1990s. The index shows that the pace and pattern of financial opening vary widely across regions, with Asia having relatively high levels of financial openness since the 1970s, while Latin America has seen a decline in financial openness during the 1980s. Eastern and Central European ex-planning economies have been liberalizing their financial markets most rapidly in recent years. The authors conclude that their index provides a more comprehensive measure of financial openness than existing indexes, with wide coverage across countries and time periods. The index is constructed in a transparent manner and is easy to update, making it a valuable tool for researchers and policymakers.This paper introduces a new index, KAOPEN, to measure the extent and intensity of capital controls in cross-border financial transactions. The authors argue that existing measures fail to capture the complexity of capital controls and their effects. KAOPEN is constructed using data from the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), which provides information on the extent and nature of regulations governing external account transactions. The index is based on binary dummy variables that codify the presence of restrictions on cross-border financial transactions. These variables include the presence of multiple exchange rates, restrictions on current account transactions, restrictions on capital account transactions, and the requirement of the surrender of export proceeds. The index is then standardized to reflect the intensity of capital controls, with higher values indicating greater financial openness. The authors compare their index with other measures of financial openness, including the Quinn index and the Miniane index. The correlation between KAOPEN and the Quinn index is found to be 83.9%, suggesting that KAOPEN is a proxy for the intensity of capital controls. The index is also compared with the Miniane index, which is based on more disaggregated AREAER information. The correlation between KAOPEN and the Miniane index is found to be 80.2%. The authors also note that their index is a de jure measure of financial openness, as it attempts to measure regulatory restrictions on capital account transactions, rather than de facto measures based on interest rate parity or arbitrage conditions. The authors find that the world is moving steadily toward greater financial openness, with industrialized countries maintaining high levels of financial openness. Less developed and emerging market countries have slowed their efforts to open financial markets in the 1980s but have accelerated financial opening since the 1990s. The index shows that the pace and pattern of financial opening vary widely across regions, with Asia having relatively high levels of financial openness since the 1970s, while Latin America has seen a decline in financial openness during the 1980s. Eastern and Central European ex-planning economies have been liberalizing their financial markets most rapidly in recent years. The authors conclude that their index provides a more comprehensive measure of financial openness than existing indexes, with wide coverage across countries and time periods. The index is constructed in a transparent manner and is easy to update, making it a valuable tool for researchers and policymakers.