This dissertation explores the interrelated dynamics of stock market liberalization, banking sector volatility, and the strategic utilization of Sovereign Wealth Funds (SWFs) in oil-rich countries. Comprising three essays, the study provides a comprehensive analysis of the implications of economic and financial policies on market stability and performance in an emerging market environment dominated by oil revenues. The first essay examines the impact of the 2015 liberalization of the Saudi stock market, known as Tadawul. Utilizing a natural experiment design, it assesses how the selective inclusion and exclusion of firms from market liberalization, based on their location in religiously significant areas, affected stock returns and volatility. The findings suggest that liberalization has increased stock returns and price volatility. The second essay shifts focus to the volatility of the banking sector during periods of financial crises, comparing the sector's performance to the broader market index (TASI). The research identifies resilience patterns within the banking sector using a Multivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH)-in-mean model. It discusses the implications of these patterns for financial stability and regulatory policy. The third essay explores a more advanced oil-rich economy. Specifically, how has Norway managed to use its sovereign wealth fund, Government Pension Fund Global (GPFG), to shield itself from further oil price volatility? The study uses a Dynamic Conditional Correlation-Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) model to evaluate the effectiveness of Sovereign Wealth Funds (SWFs) as financial buffers against economic shocks caused by fluctuations in oil prices. These essays contribute to the understanding of financial liberalization, crisis management in banking, and the strategic use of SWFs in stabilizing economies dependent on volatile resources. The dissertation highlights the necessity of tailored regulatory structures and strategic policy interventions to augment economic stability and growth in developing economies. The findings hold significant implications for policymakers, particularly in resource-rich economies striving to balance market liberalization with financial stability and economic diversification.