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      Question

      As per the Financial Stability Report, which trend is

      contributing to underlying vulnerabilities in global financial markets?
      A Reduction in equities Correct Answer Incorrect Answer
      B Declining role of NBFIs Correct Answer Incorrect Answer
      C Sharp rise in risk assets Correct Answer Incorrect Answer
      D Weakening interconnectedness between banks and NBFIs Correct Answer Incorrect Answer
      E Decline in stablecoins Correct Answer Incorrect Answer

      Solution

      The report states that although global financial markets appear strong, underlying vulnerabilities persist due to a sharp rise in equities and other risk assets, the expanding role of Non-Bank Financial Intermediaries (NBFIs), and rapid growth of stablecoins.

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