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Yellen vs Warren: Are ETFs Providers too Big to Fail?

Sen. Elizabeth Warren, D-Mass., said she doesn’t think regulators are going far enough in their oversight.

Specifically, she suggested that BlackRock, the institutional money management giant and leading ETF provider, also should be designated as a “systemically important financial institution” or SIFI — that is, a firm that could put the economy at risk if it were to collapse.

Warren and Yellen engaged in an at times contentious exchange over the issue, with Warren repeatedly interrupting the Treasury secretary as she sought to respond.

BlackRock is the largest money manager in the world, with nearly $9 trillion in assets. The firm last year helped guide the Fed when the central bank was buying corporate bonds.

Yellen said “it’s not obvious to me” that the “systemically important financial institution” designation would be “the correct tool to address” risks posed by asset management firms like BlackRock.
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