What BlackRock Sees

The tone of regulators in the U.S. and Europe is pretty consistent:a more secure banking system with more capital,according to Laurence Fink,CEO of BlackRock,the world's largest money manager.In Europe,they're talking about Basel III,with lots of capital,and it's similar in the U.S.Most certainly banks are more reluctant to lend, because they're not certain about capital requirements in the future.Corporations are not hiring;not building factories;and not buying equipment.Huge pools of money are sitting in banks and corporations.This is the problem we're seeing today in our economy.They're seeing what the new regulations will be.
BlackRock is seeing increased appetite for mutual funds and exchange-traded funds.We're seeing renewed interest in equities,as opposed to fixed income.We're not concerned about our competition at all,Mr.Fink insisted.The etf market needs a lot of liquidity and research.It is our belief the etf market will continue to grow from both institutions and individual investors.
There's a healing in commercial real estate going on,Mr.Fink believes,but not fast enough.He's not terribly worried about it,although some of the regional banks will be destabilized.The Federal Reserve is aware of this.
Mr.Fink is one of the more forthright executives in the financial industry.His colleague at BlackRock,Bob Doll,follows the same path of openness.

BlackRock To Enlarge

BlackRock is purchasing Barclays Global Investors,which is comprised of the iShares investment products.BGI manages about 1.5 trillion dollars-or about half the exchange-traded fund industry.When the deal is consummated,BlackRock will be the largest money manager in the world,with more than 2.7 trillion under management.That is more than the Federal Reserve manages.Consolidation of financial firms is a typical response to crises.
Barclays PLC,the British bank which owns BGI,will hold on to a 20% stake in it.BlackRock is itself part-owned by Bank of America and PNC Financial Services Group.Laurence Fink is CEO of BlackRock.