Emerging Market Economy (EME) banks have historically relied more on repricing gap management to mitigate interest rate risk (IRR). This approach involves aligning the timing of interest rate adjustments for assets (e.g., loans) and liabilities (e.g., deposits) to minimize the impact of interest rate changes on net interest income (NII). This strategy is practical and cost-effective, especially in financial systems with less developed derivative markets or limited access to advanced hedging tools.

A is incorrect: AE banks are more known for their use of derivatives.
B is incorrect: While EME banks use time deposits, a core part of repricing gap management, they are less reliant on diverse wholesale funding compared to AE banks.
C is incorrect: This strategy is more typical of AE banks with longer-term fixed-rate assets.