BlackRock Earnings Call
BlackRock reported earnings and hosted a conference call yesterday morning. The company said, "In order to ensure compliance with new OCC guidelines regarding short-term investment funds STIFs BlackRock chose to sell certain legacy securities at a loss and to make a one-time 30 million contribution to the STIF funds to maintain the dollar NAV of the funds are also complying with the new rules. All of the securities effective by the new OCC guidelines had been purchased in BGI funds prior to BlackRock's acquisition to BGI and were supported by Barclay's under a $2.2 billion capital support agreement." CEO Larry Fink commented, "We always believe that we needed to change the money market industry to make it much safer with less systemic risks. We always believe that we need to create a sounder product for our clients and users of the product. So, I've always believed that we needed to have a constructive dialog with the regulators in Europe and in the United States. So we have taken a much more constructive approach in some of our peers over the years on this point. I am very pleased with the movement that we made in this industry. This was led by Goldman Sachs, but I do believe daily NAV is a good step by providing more transparency, which we've always said at BlackRock, we're prepared to do this. We may disagree with the outcomes what ultimately comes in and how do we navigate risks, but we're having a constructive dialogue. I do believe the net result will be a safer money market fund industry and I believe the product will be sound for investors. I'm not here to suggest that we're a 100% supporting floating rate NAV. We believe there's other approaches that probably get achieve the same results without a float, but I'm not -- we're going to be constructive on this, but the key element is to make this a product in which our investors see opportunities to invest to make excess return at the same time making sure as an industry we don't represent real risk for the industry and for society." In other news ICI's latest "Money Market Mutual Fund Assets" says, "Total money market mutual fund assets decreased by $15.19 billion to $2.701 trillion for the week ended Wednesday, January 16."
