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Currency mismatches in the major EMEs have been much reduced over the past decade. The development of deeper domestic bond markets has contributed greatly to this. Stresses in international markets after the failure of Lehman severely tested these new markets. There was a flight of foreign investors largely because of the limited international “collateral capacity” of this new asset class. But those markets with a substantial domestic investor base withstood this intense pressure well. The wider development of exchange-traded interest rate derivative contracts in EME currencies would be helpful.