10.2 C
New York
Friday, March 29, 2024

Senator Warren: “BlackRock Manages More Assets than the Entire GDP of Japan.” (How About JPMorgan Chase Having Custody of Assets That Are 5.8 Times the GDP of Japan.)

Courtesy of Pam Martens

Senator Elizabeth Warren Speaking at Senate Banking Hearing, March 24, 2021

Senator Elizabeth Warren Speaking at Senate Banking Hearing, March 24, 2021

Yesterday, during a Senate Banking hearing with witnesses Fed Chair Jerome Powell and Treasury Secretary Janet Yellen, Senator Elizabeth Warren grilled Yellen on why BlackRock wasn’t being investigated for posing a systemic risk to the U.S. financial system. Warren stated:

“BlackRock is the world’s largest asset management firm, overseeing nearly $9 trillion in assets. That’s more than double where it was 10 years ago. It also holds a stake in just about every company listed on the S&P 500. To put that in perspective, Blackrock manages more assets than the entire GDP of Japan, or Germany, or Great Britain or any other nation in the world, except the United States and China.”

BlackRock may, indeed, pose a systemic risk to the U.S. financial system but it’s not because it holds a stake in just about every company listed on the S&P 500. It’s because it produces Exchange Traded Funds (ETFs) which promise intraday liquidity for buyers and sellers, which clearly is not the case during a market panic. During the market panic over the pandemic last year, the Fed gave a no-bid contract to BlackRock to manage its corporate bond buying programs, which included allowing BlackRock to bail out its own junk bond and investment grade bond ETFs that were tanking. (See Icahn Called BlackRock “An Extremely Dangerous Company”; the Fed Has Chosen It to Manage Its Corporate Bond Bailout Programs.)

But if we’re going to seriously talk about systemic risk to the U.S. financial system we need to start at the top rung of the ladder. That’s JPMorgan Chase. According to the Office of the Comptroller of the Currency, the regulator of national banks, JPMorgan Chase “maintains one of the world’s largest and most complex fiduciary businesses with total fiduciary and related assets of $29.1 trillion, including $1.3 trillion in fiduciary assets and $27.8 trillion of non-fiduciary custody assets.”

Not to put too fine a point on it, but $29.1 trillion is 5.8 times the $5 trillion GDP of Japan in 2020 while BlackRock’s assets are just 1.8 times Japan’s GDP in 2020.


Continue Here

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,449FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x