Iberian colonies produced the vast majority of world precious metals in the Early Modern period, which increased liquidity in the Iberian Peninsula. The chapter focuses on the relationship between liquidity and financial development – including other relevant variables such as instruments and institutions – to examine the efficiency of the financial systems in Castile and Portugal. Public credit, debt management and the cost of public debt service are considered, as well as private debt, the diversity of financial instruments and the cost of capital. Finally, the authors compile their perspective on the main similarities and differences in the development of the financial systems of Castile and Portugal.