Michael Smallberg
is an investigator for the Project On Government Oversight.
1) BlackRock Inc. just bought ETF, and its growing larger and larger. Is BlackRock one of those institutions the U.S. Government claims they are “Too big to fail” ?
In the wake of the financial crisis and the bailout, Congress created a new body–the Financial Stability Oversight Council–to keep an eye on firms that pose a systemic risk. As part of this process, we think the Council should take a close look at BlackRock and other large non-bank financial institutions.
2) The big banks and the federal reserve took and still take the responsibility for the recession. But what about investment companies like BlackRock, Fidelity, Vanguard and State Street, where they involved in any way, with the economic bailout in 2008? And if so, why haven’t they been publicly scrutinized?
The bailout meant big business for BlackRock, which played an integral role in the emergency programs run by the Federal Reserve and the Treasury Department. I think companies like BlackRock and Vanguard haven’t received as much scrutiny because they were not the direct targets of the government’s rescue programs.
3) BlackRocks appears to provide balance sheets and portfolios of Government Agencies. Is there something fishy about that?
In our 2009 letter, we raised concerns that the government wasn’t doing enough to protect taxpayers from potential conflicts of interest when it hired BlackRock and other companies, “many of which have a direct financial interest in the same types of toxic assets that they are managing and valuating for the government.”
