The call from 33 Liberty
Stakes · Whether the world’s largest asset manager becomes the operational arm of a Federal Reserve credit facility.
It is the last week of March 2020. U.S. corporate-credit spreads have blown out. Dealers are not warehousing risk.
Some corporate-bond exchange-traded funds (s) — including iShares funds you sponsor — trade at discounts to unthinkable in February.
The Federal Reserve, using of the Federal Reserve Act with Treasury Secretary Steven Mnuchin’s approval, is standing up two facilities: the Secondary Market Corporate Credit Facility () and the Primary Market Corporate Credit Facility ().
The Federal Reserve Bank of New York wants BlackRock Financial Markets Advisory () as investment manager of the special-purpose vehicle ().
You would be a fiduciary to the facility, at the New York Fed’s direction — not a principal putting BlackRock capital at risk. You would also be the convenient villain in the next congressional hearing: the manager who might buy his own products with public money.
Constraints of the office here
- — You do not control the Fed’s legal authority or Treasury’s equity cheque.
- — Client assets cannot be pledged to ‘save the market.’
Options · keys 1–3