BlackRock CEO Says Bailout Should be Profitable
| BlackRock CEO Says Bailout Should be Profitable |
| By Reuters |
| Monday, September 29, 2008 |
BOSTON (Reuters)�Laurence Fink, who heads the largest U.S. asset management company, BlackRock Inc., said he expects a proposed bailout plan ultimately to be profitable, but added Congress was “playing with fire” by voting it down. Mr. Fink, an expert in the asset backed securities that lie at the heart of the recent problems of many banks, said he is worried that banks are not able to lend at the moment and that a bailout plan must be approved quickly to restore confidence. He also said there is deleveraging in financial markets, which has been accelerated by fears of heavy losses at hedge funds.
“I’m disappointed,” Mr. Fink told CNBC television after the U.S. House of Representatives voted to reject U.S. Treasury Secretary Henry Paulson’s proposed bailout. “I think Congress is playing with fire. Hopefully, this is just politics.”
As part of the proposed bailout, the U.S. Treasury would buy toxic assets from ailing financial companies and likely allow investment managers to manage a fund with these assets.
The Dow Jones industrial average tumbled 777.68 points, or nearly 7% on Monday [Sept. 29] and the decline accelerated after the vote.
“All the shock is in the equity market,” Mr. Fink said, adding: “I think the market is speaking loudly.”
For BlackRock, which manages $1.4 trillion in assets, Mr. Fink said the current market decline represents a buying opportunity not a “time to run away.”
Mr. Fink said he is in favor of a more centralized regulator at a time many people have been pointing fingers at regulators for having allowed the crisis to happen.
By Christian Plum and Svea Herbst-Bayliss
Christian.Plum@ThomsonReuters.com
Svea.Herbst@ThomsonReuters.com
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