The Financial Stability Board focuses on which of the following?

• A. Enhancing corporate governance in financial markets
• B. Monitoring and advising on market developments
• C. Regulating exchange-traded funds
• D. Promoting retail investor participation

Answer: (B)

The Financial Stability Board (FSB) is primarily responsible for monitoring and advising on the developments in global financial markets to promote stability. This includes assessing risks to financial stability, coordinating international policy responses, and facilitating collaboration among national and international financial authorities. Monitoring market developments allows the FSB to track trends, identify vulnerabilities, and recommend appropriate policy measures to maintain financial stability.

The other options, while relevant to various aspects of financial markets, do not capture the main focus of the FSB. Enhancing corporate governance in financial markets is an important area, but it is typically addressed by regulatory bodies and standards organizations specifically tasked with corporate governance. Regulating exchange-traded funds is a specific regulatory function that falls under the purview of individual financial regulators rather than the FSB as a coordinating body. Promoting retail investor participation is significant for market accessibility and inclusivity, but it is not the primary focus of the FSB, which centers on systemic risk and stability rather than individual investor engagement.