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‘Asset managers are dramatically less susceptible to financial distress than banks, broker-dealers or insurers,’ BlackRock wrote in response to the proposal.
‘Asset managers are dramatically less susceptible to financial distress than banks, broker-dealers or insurers,’ BlackRock wrote in response to the proposal.
(ERIC THAYER/REUTERS)

Giant money managers fight ‘too big to fail’ label

Massive asset managers, including BlackRock Inc., Pacific Investment Management Co. LLC and Fidelity Management & Research Co., are pushing back hard on global regulators that are currently reviewing whether they should be deemed too big to fail.

In January, the Basel, Switzerland-based Financial Stability Board, headed by Bank of England Governor Mark Carney, and the International Organization of Securities Commissions (Iosco) put out a proposal to help determine when and if an asset manager should be deemed “globally systemically important.” Regulators are on a mission to identify such firms, and in many cases require them to hold more capital, because their “distress or disorderly failure, because of their size, complexity and systemic interconnectedness, would cause significant disruption to the wider financial system and economic activity.”