BlackRock and Vanguard own huge amounts of bank shares—but only one agrees with FDIC policy on undue influence.

The article focuses on BlackRock's management of a record $11.6 trillion in assets and its decision to delay signing an agreement with the Federal Deposit Insurance Corporation (FDIC) that would enhance regulatory oversight of its dealings with banks. This agreement is part of the FDIC's response to the collapses of Silicon Valley Bank and Signature Bank in March 2023, which prompted concerns about the influence of large asset managers like BlackRock and Vanguard on banking operations. While Vanguard has already signed the agreement and committed to providing additional data to the FDIC, BlackRock maintains that its existing passivity agreement with the Federal Reserve suffices to ensure it does not exert undue influence over banks. The FDIC has expressed the need to reassess the regulatory comfort extended to major asset managers regarding their ownership stakes in banks. [Extracted from the article]