US bank regulator gives BlackRock February deadline on bank stakes, Bloomberg reports
3:07 pm Sunday, January 12th, 2025
(Reuters) -The Federal Deposit Insurance Corporation gave a fresh deadline of Feb. 10 to BlackRock to resolve an issue regarding oversight into the asset manager’s investments in FDIC-regulated banking organizations, Bloomberg News reported on Sunday, citing three people with knowledge of the matter.
The FDIC may open an investigation into BlackRock and demand more information from the company if it fails to make sufficient progress toward resolving the issues, the report said.
The move by the FDIC follows a Jan. 10 deadline that BlackRock failed to meet, according to the report.
The FDIC declined to comment, while BlackRock did not immediately respond to a request for comment on Sunday.
BlackRock had asked the FDIC to extend its deadline to reach an agreement on how the agency would oversee the asset manager’s investments in FDIC-regulated banking organizations until March 31, according to a letter the firm sent to regulators on Thursday and seen by Reuters.
That letter was the latest move in a months-long tug of war between the FDIC and the biggest managers of index-based mutual funds and exchange-traded funds over the rules governing their passive investments in FDIC-regulated banks.
In late December, Vanguard Investments hammered out terms of such a passivity agreement with the FDIC, which immediately afterward asked BlackRock to sign a similar agreement by the Jan. 10 deadline.
BlackRock, Vanguard and State Street now collectively control some $26 trillion in assets. Since the financial crisis of 2009, investors have poured money into their low-cost index funds, catapulting the three firms into the ranks of the largest owners of most large U.S. corporations.
(Reporting by Gnaneshwar Rajan in BengaluruEditing by Matthew Lewis)
