BlackRock and Fidelity Investments will be studied by U.S. regulators who are in the early stages of reviewing whether asset managers pose a potential risk to the financial system, two people with knowledge of the matter said.
Bloomberg reports that the Financial Stability Oversight Council’s discussion 31st October and agreement to review BlackRock and Fidelity don’t necessarily mean the companies will be designated systemically important by the council, according to the people, who requested anonymity because the meeting was closed to the public.
The panel didn’t take any formal action regarding the companies.
FSOC’s preliminary talks may presage months of wrangling between the industry and officials charged with trying to prevent a repeat of the 2008 financial crisis. Asset managers are among non-bank financial companies that the council is empowered by law to evaluate to determine whether their failure could threaten the entire system and thus require Federal Reserve oversight. BlackRock, Fidelity and the mutual-fund industry’s trade group have said money managers aren’t a threat.
'We continue to believe that the asset-management industry, and mutual funds in particular, do not present the types of risk that the FSOC was designed to address', Vincent Loporchio, a spokesman for Fidelity, said in an e-mail in response to a question about the FSOC meeting. BlackRock spokesman Brian Beades said the company 'doesn’t comment on rumor or speculation'.
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