In this paper we evaluate the transmission of the US subprime crisis to emerging markets. Our interest in this topic is partly related to the widespread view that prior to the current crisis many emerging market countries had undertaken reforms that were designed to, and would in fact, insulate them from adverse shocks from the rest of the world. These policies included substantial increases in reserve assets and substantial reductions in net government debt. Moreover the currency exposure of EM governments was reduced in some cases to long dollar positions, commercial bank net foreign exchange borrowings were strictly limited and nonfinancial firms foreign currency debt was monitored and in many cases strictly controlled. Finally, emerging markets were generally experiencing current account and primary fiscal surpluses.