This document is based on a special briefing on the U.S. mortgage crisis and emerging markets. This is a paper on what was going on in the U.S. mortgage markets and what it means for emerging markets. The defining event in global financial markets over the past 6 weeks has been turmoil spreading from the U.S. subprime mortgage market. This began as a credit market event resulting from growing concerns about the sharp rise in defaults on subprime mortgages in the United States. More recently, however, it has become a liquidity event with holders of mortgage securities finding it very difficult to roll over short-term financing in the commercial paper (CP) market.