BlackRock (BLK, Financials) is against the Federal Deposit Insurance Corporation's plan to limit asset managers' power over banks. The asset giant is worried about regulatory confusion and how this could affect investments in bank stocks.
The FDIC suggested changes to the Change in Bank Control Act in August. If approved, buyers would have to get permission from the FDIC before buying 10% or more of an FDIC-supervised institution. BlackRock and Vanguard have been asked to give details about the investments they have made in banks through index funds. They have until October 31 to sign new neutrality agreements. These deals would require them to tell the FDIC whenever they have more than 10% ownership.
"BlackRock strongly opposes the proposal, which we believe would harm investors, disrupt the flow of capital to the economy, and undermine the efficacy of the CBCA framework," the business said in a statement. BlackRock also said that the plan didn't work well enough with the Federal Reserve and the Office of the Comptroller of the Currency, which could cause reviews to be uneven.
BlackRock said again that it does not have any control over FDIC-supervised institutions and that there is no proof that other asset managers are not following the rules for inaction.
In a comment to the Financial Times, Vanguard said it had talked to lawmakers and offered changes to make standards about inactivity clearer and more precise.
Concerns were also made by the U.S. Chamber of Commerce, which said that the FDIC's plan did not show proper cooperation between agencies and did not properly explain why the suggested changes were needed.
