BlackRock, Inc. (NYSE:BLK) CEO Larry Fink spoke with FOX Business Network’s (FBN) Maria Bartiromo during Opening Bell with Maria Bartiromo about investing in the marketplace. Fink said, “I think we’re going to be living with a lot more volatility. I think that’s going to be one of the key issues for the next few years.” Fink went on to say, “We’re going to look back and say, boy, the last five years were the easiest time to invest.” When asked whether BlackRock has been considered a Systemically Important Financial Institution (SIFI) Fink said, “We’ve had no clarity”  and that “I’m not sure what it means if I’m a SIFI because I’m already regulated by many of these entities already.” Larry Fink also commented on regulation saying, “I do believe we have safer, sounder, financial markets today and we need to make sure that we’re vigilant.” Larry Fink spoke about the President of the European Central Bank Mario Draghi saying, “Mario has done an incredible good job.  He’s been outstanding in terms of his just consistency.” When asked about emerging markets Larry Fink said, “I believed going forward as an investor of an emerging world, you’re going to have to be much more granular.  You’re going to have to start spending more time focusing on singularities of each country and investing in a mix of different countries.”

Larry Fink

Larry Fink on regulation:

“Well, the banks are much better capitalized.  They’re much safer than they’ve ever been in tens and tens of years.  They have a more stable revenue business now, too, as a result of it.   Banks should be trading at higher PEs, because the factor, they’ve been regulated out of some of the riskier businesses because the fact now that they have to be more of an agent again instead of a principal.  The regulation is providing society with more safety, but in the long run, in my opinion, it’s going to make banks better and it’s going to make banks to be able to trade at higher PEs, because they have sounder, stronger, safer businesses. So, there’s a plus and minus; you know, we go back to 2003 and 2004 when we had Sarbanes-Oxley and everyone said that’s going to be the death knell of IPOs and everyone said it was bad.  You know, we adapt.  We learn. And as a result of regulation from Sarbanes-Oxley, why are the Chinese IPOs coming here?  Because the world investors feel investing in the U.S. exchange stocks are a safer place.   So I think, we should continue to make sure we have strong, well-balanced regulatory supervision.  In some cases, I may disagree with the degree of regulation with some industry.  They’re still reviewing the asset management business, so I don’t know where that will be and where that becomes.  We should see by June some regulation out of the SEC related to money market funds which we’ve been very supportive of.  So, I do believe we have safer, sounder, financial markets today and we need to make sure that we’re vigilant.  I mean, the great thing about capitalism, capitalism tries to find opportunity and sometimes that opportunity is-it moves faster than regulation.  So hopefully as we adapt, we build; we find new opportunities in the markets – and I don’t mean this in any negative way, I mean it in the most positive, capitalistic way, let’s hope that our regulatory regimes keep pace so we don’t have another financial crisis.”

Larry Fink on whether BlackRock will be deemed systemically important to SIFI:

“We’ve had no clarity.  We are working very closely with the FSOC.  We are working — we are having many conversations with the regulators in Europe.  So this is not just a U.S. issue, this is a European issue, too. And so we, among many other people, are working, are asking for advice, asking for opinions and, obviously, they just take our opinions and they may do — they may throw them out or they may adapt some of our opinions. And so it is a one-way avenue; they ask us questions, we provide them with answers and we get very little back.  And that’s how it should be.”

Larry Fink on whether BlackRock will change dramatically if considered a SIFI:

“It may change other firms more than BlackRock, Inc. (NYSE:BLK) because we’re already regulated by the Federal Reserve, we’re already regulated by the OCC, we’re regulated by the SEC, the FCA.  We’re – we are heavily regulated because when — and we also have capital set aside for operational risk. These are all components from when we did the mergers, when we purchased BGI from Barclays PLC (NYSE:BCS) (LON:BARC).  These are all part of the agreements we had with various regulators.   P&C Bank still owns 20 percent of BlackRock so we did, as a result of that, we still fall under the Federal Reserve.   And so I’m not sure what it means if I’m a SIFI because I’m already regulated by many of these entities already.  We have a great working dialogue with our regulators, very good working – and it’s constructive.  And I think one of the reasons why BlackRock, Inc. (NYSE:BLK) has been quicker to adapt in the marketplace is because we have to be – we have been adapting to the demands of our regulators.”

Larry Fink on Europe:

“Europe also has been consistently seeing that inflation rates are way below their targeted 2 percent.  And many people think there’s deflation.  I’m not sure there’s deflation in Europe; there’s certainly disinflation and we’re seeing a declining inflation rate.  And so Europe does need a little more stimulus, because in my mind, Europe was much later, it did these policies later than the U.S.  And this is why our economy is starting to be mending and going upward.  Our stress test, if you remember, were now five years ago, when Secretary Geithner announced them and now the Europeans are doing their third and final stress test now.  So this is one of the reasons why Europe has been much slower in terms of returning to normality.”

Larry Fink on President of the European Central Bank Mario Draghi:

“Mario has done an incredible good job.  He’s been outstanding in terms of his just consistency.  Europe’s improving because the peripheral is improving.  Spain has improved dramatically from where it is, even Greece has improved under Samaras quite considerably.   Northern Europe is improving just marginally.  And, at the same time, the European banks are still deleveraging.  So, we have a serious job issue in Europe.”

Larry Fink on emerging markets:

“I think people are reevaluating their style in which they invest in emerging markets.  We saw hundreds of billions of dollars over 10 years flow into emerging markets.  In most ways people invested is in through index funds, the MSCI index funds… when China was growing at 12 percent and 10 percent, it was like the high tide; everybody rose.  All the countries did quite well.  Now, with China growing at 7 percent and there’s some big fear that they could slow down to 6 percent – you’re now beginning to see that there’s a real granularity to how some countries are performing.   Some countries

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