This paper examines the relative effectiveness of bailouts and capital controls in the context of financial crisis experienced by Malaysia and Indonesia in 1997-98. Using a financial pressure index (FPI) similar to that of Kaplan and Rodrik (2001), the paper shows that financial pressure can be effectively and immediately released through capital control measures. Capital controls, therefore, provide the economy with breathing space necessary to implement the required economic policy changes. Overall capital controls can act as circuit breakers in today’s global financial environment, hence they can be considered as effective tools to deal with financial crises.