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Laurence D. Fink, Chairman and Chief Executive Officer of BlackRock, speaks at a private event on May 14 2014. (Fred Lum/The Globe and Mail)
Laurence D. Fink, Chairman and Chief Executive Officer of BlackRock, speaks at a private event on May 14 2014. (Fred Lum/The Globe and Mail)

capital markets

BlackRock CEO sees markets falling 15% without fiscal-policy action Add to ...

Laurence Fink, who runs the world’s largest asset manager as chief executive officer of BlackRock Inc., said markets may fall 15 per cent if governments don’t take aggressive fiscal policy actions and there are aberrant results from referendums in Europe.

Mr. Fink said he is more pessimistic than the markets at the moment. If governments move to spur their economies, then markets could go in the other direction and rise 10 per cent, he said in an interview Thursday.

The chief executive officer said anger worldwide is growing, as persistently low interest rates hurt savers and pension plans, while people with capital are benefiting from the environment. Mr. Fink expects that the Federal Reserve will raise interest rates in December.

“This is one of the big reasons why we have such anger in the world,” he said.

Mr. Fink said uncertainty from Britain’s decision to leave the European Union is getting worse. He said chief executives in Britain aren’t incrementally hiring and are holding off on investing until there is more political clarity.

“We are in more dangerous water in Europe than we have been in years,” Mr. Fink said. He pointed to the upcoming referendum in Italy where voters will decide on constitutional changes proposed by Prime Minister Matteo Renzi to limit the power of the Senate, the upper house of parliament.

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