The financial crisis and sizable international reserves depletion: From 'fear of floating' to the 'fear of losing international reserves'?

► Only about half of the EMs drew down their IR during the global crisis. ► Countries that internalized their exposure to trade used their IR as buffer stocks. ► After a rapid initial depletion of reverses, they stopped. ► We provide a model explaining the logic behind the fear of reserves depletion.