(Bloomberg) -- If there's a stampede for the exit in the junk bond market, it won't be investors in ETFs that get hit hardest.That's the conclusion of the Financial Stability Board, whose members include the U.S. Federal Reserve and the Bank of England, published in a consultation document on Wednesday. It runs somewhat counter to warnings from Carl Icahn and Howard Marks that the funds can give an illusion of liquidity yet may be hard to get out of when market sentiment sours. It also gives a boost to ETF champions, such as BlackRock's Larry Fink, who say the funds offer unparalleled transparency.

Buried on the penultimate page of the FSB document is an explanation of how the mechanics of ETFs mean even funds based on assets that trade in less liquid markets should be able to sell their holdings and honor all their obligations during a large withdrawal.

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