WFC - Could 3 Powerful Fund Managers Take Control Of US Banks? | Benzinga
The big three fund managers that jointly manage more than $23 trillion in assets are coming under the scrutiny of federal regulators over their large holdings in many U.S. banks.
BlackRock Inc (NYSE:BLK), State Street Corp (NYSE:STT) and Vanguard run funds that passively track the performances of equity indexes such as the S&P 500. To achieve this, they attempt to match the weightings of stocks held in these funds, to the index weightings.
But in doing so, BlackRock and Vanguard have each built holdings of more than 10% of the shares at several banks, and this is worrying the Federal Deposit Insurance Corp (FDIC), one of the government institutions responsible for banking supervision.
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Ten Percent Rule
At present, 10% ownership of shares is considered a threshold at which point an investor is considered ...