ViewPoints, letters and consultations

In this paper, we set out how policy aimed at boosting both capital demand as well as supply can kick-start a virtuous cycle, facilitating the strategic investment needed to drive economic competitiveness, and helping more Europeans share in the upside of economic growth.

In this Viewpoint, we discuss how European investors use ETFs as building blocks in resilient portfolios, driving economic prosperity and enhancing capital market functioning.

In this paper, we set out how policy aimed at boosting both capital demand as well as supply can kick-start a virtuous cycle, unlocking investment to finance growth and enabling more and more people to take a meaningful stake in it.

In this spotlight, we explore the introduction of 24-hour trading and its ability to provide continuous investor access to certain U.S. securities, enabling investors to trade beyond traditional market hours.

In this Spotlight, we discuss the differing levels of need for personal pension products across EU member states and emphasize that the PEPP should complement —rather than replace— well-run personal pension and collective workplace schemes.

This Spotlight introduces the concept of financial planning based advice and outlines the regulatory changes that are needed to allow its rollout for the benefit of retail investors.

This paper looks at how the global energy landscape has changed dramatically in just a few years, with Russia’s invasion of Ukraine in 2022 accelerating the desire of countries and government leaders around the world to balance energy security, reliability, affordability and decarbonization.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in the EU and the UK.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

The Policy Spotlight explores BlackRock's perspective on the Basel III Endgame and G-SIB Surcharge Proposals, shedding light on their implications for global banking regulations. It delves into BlackRock's analysis of potential impacts and strategic considerations in response to these proposed regulatory changes.

In this Policy Spotlight we discuss the raft of regulatory changes in UK Defined Contribution (DC), how these changes will impact the design of default strategies, and where we see the market going in the next decade.

In this Policy Spotlight, we raise awareness of the GAAP accounting asymmetries that exist between investment products that provide substantially similar economic exposures: bonds held through fixed income ETFs and bonds held in an SMA. This paper is a continuation of our efforts to advocate for the modernization of the global bond markets for the benefit of investors.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

In this Policy Spotlight, we examine the use of fractional investing in ETF savings plans, exploring the differences in ownership models and the implications for retail investor protection. This is in response to ESMA’s proposed guidance, which aims to clarify the requirements around the use of derivatives on fractions of shares within distribution models.

In December 2022, the U.S. Securities and Exchange Commission (SEC) proposed four separate rulemakings related to U.S. equity market structure. This policy spotlight provides a summary of BlackRock’s views on certain key provisions of the proposed rules.

In this ViewPoint, we take a closer look at key issues central to the European debate around increasing the resilience of MMFs. We challenge the hypothesis that the Low Volatility Net Asset Value (LVNAV) fund structure is prone to cliff edge risks and we comment on the debate around the calibration and composition of liquidity buffers. We also look beyond the events of March 2020, to the more recent experience of European MMFs, and make a number of recommendations that we believe can help further underpin MMF resilience.

In this discussion paper, we examine the impact of deviations from net asset value on daily money market fund flows across 11 large funds across three currencies from January 2, 2020-March 31, 2022. We find no evidence that fund flows are related to NAV deviations. Further, we find no empirical support for a non-linear (i.e., a “cliff”) relation of NAV deviations and flows driven by a destabilizing rush to exit by investors who perceive a first mover advantage.

In this Spotlight, we introduce a set of fundamental principles for policymakers, which we believe should form the basis for making public markets more inclusive and supportive of retail investors globally. We also make recommendations on market structure enhancements in line with these principles.

In this Policy Spotlight, we place open-ended bond funds into the wider context of the market ecosystem, providing recommendations to enhance not only fund liquidity management, but market structure and transparency.

In this Spotlight, we express support for a global baseline of climate-related disclosure standards to enable informed investment decisions and urge regulators to work with market participants and standard setters, like the ISSB, to continue developing industry-specific guidance.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

In this Spotlight, we discuss why LMTs are used, the criteria and circumstances which lead managers to choose specific LMTs over others, and the constraints posed by specific fund structures, local regulation, operational issues, and market infrastructure.

In this Spotlight, we express support for a global baseline of climate-related disclosure standards to enable informed investment decisions and urge regulators to work with market participants and standard setters, like the ISSB, to continue developing industry-specific guidance.

In this discussion paper, we examine the impact of shocks on U.S. bond fund flows by sub-asset class and by type of investment vehicle. The time-series analysis we conduct shows that a risk-off shock to markets does not necessarily result in large bond fund outflows. Accordingly, we conclude that there is little evidence that bond funds are a source of systemic risk, particularly bond ETFs.

In this Policy Spotlight: CCP Margin Practices - Under the Spotlight, we review the COVID-19 market volatility and discuss our key recommendations for improving margining practices, as well as additional central clearing counterparties (CCP) resilience, recovery, and resolution recommendations.

In this Policy Spotlight: Swing pricing – Raising the bar, we set out our perspective on the principles that underpin swing pricing, why it is used, and the appropriate way to use it, before sharing views on best practises that should guide the swing pricing process, and offering recommendations on how to maximise its potential.

In this Spotlight, we draw on case studies of pension system reform around the world, and examine the demographic transformation informing retirement policy considerations in the Kingdom of Saudi Arabia. Our recommendations call on government and industry to work together to develop a range of long-term savings and retirement solutions, with a focus on workplace DC retirement savings plans, and appropriate private products and tools.

In this Spotlight, we draw on case studies of pension system reform around the world, and examine the demographic transformation informing retirement policy considerations in the Kingdom of Saudi Arabia. Our recommendations call on government and industry to work together to develop a range of long-term savings and retirement solutions, with a focus on workplace DC retirement savings plans, and appropriate private products and tools.

This ViewPoint summarises the key financial services policy developments impacting retail investors, institutional investors, and distributors in Europe.

This ViewPoint focuses on providing an update on LIBOR transition, information and recommendations on outstanding issues, and what to expect next as we move closer to LIBOR cessation.

This iShares whitepaper offers a look at never-before-released data on the characteristics of iShares bond ETF redemption basket data. With this data as the basis, the paper delivers insights into the importance of a robust primary market process and the central role it plays in maintaining market quality for the bond ETF ecosystem.

Addendum to ‘Lessons from COVID-19: Liquidity Risk Management is Central to Open-Ended Funds’

This ViewPoint reviews how large asset managers — those that operate at scale, with a diverse client base and a long term orientation — offer value to investors, businesses, and society, by connecting capital with investments in the companies that drive the economy. We shine a light on the role that asset managers play as stewards of investments, encouraging portfolio companies to deliver long-term value through sound governance.

This Spotlight examines the role of APs in ETF markets. It specifically examines their role and resilience during the March 2020 market events. APs' breadth and size should alleviate concerns that ETFs rely on too few APs.

In this Policy Spotlight, we note the sharp uptick in ‘fallen angel’ bonds being downgraded from Investment Grade to High Yield resulting from economic shutdown measures, a trend likely to continue. We provide context on market developments, emphasizing the importance of flexibility many investors have to hold downgraded securities in dampening cliff-edge effects.

In this ViewPoint, we analyze the ownership of companies in the MSCI Europe index and examined the proxy voting of their 30 largest institutional shareholders.

In this ViewPoint, we examine financial regulatory reforms over the past decade, with a focus on the asset management sector. In addition, we look ahead and identify several areas that merit additional study from a systemic risk perspective.

In this ViewPoint, we set out a vision for a recast of the European Capital Markets Union agenda and put forward our recommendations for building deeper, better-connected capital markets in Europe.

In this ViewPoint, we leverage insights from BlackRock’s Global Investor Pulse study on long-term savings and investment trends, to put forward our recommendations for the development of a Standard Riester product, within the framework of Germany’s three-pillar pension system.

This ViewPoint considers the key trends of technological advances and new regulations that have driven changes in equity market structure in recent years. With these in mind, we put forward principles that we believe should inform future regulation and offer a series of recommendations for US and EU market structure.

BlackRock is known as one of the largest asset managers globally, but our size says little about our structure, risk profile, history, culture, or how we function today. In this ViewPoint, we provide an overview of our organization and discuss the factors that differentiate the asset management industry more generally, and BlackRock specifically, from other financial institutions.

BlackRock is known as one of the largest asset managers globally, but our size says little about our structure, risk profile, history, culture, or how we function today. In this ViewPoint, we provide an overview of our organization and discuss the factors that differentiate the asset management industry more generally, and BlackRock specifically, from other financial institutions.

BlackRock is known as one of the largest asset managers globally, but our size says little about our structure, risk profile, history, culture, or how we function today. In this ViewPoint, we provide an overview of our organization and discuss the factors that differentiate the asset management industry more generally, and BlackRock specifically, from other financial institutions.

In this ViewPoint, we take stock of the progress to date in regards to establishing central clearing in global derivatives markets. We make a number of recommendations to develop central clearing further, and we restate the case for end-investor protections. We consider how clearing could evolve over the medium and longer term.

In this ViewPoint, we consider the regulatory landscape that drives the provision of conflicting standards for cost disclosure. After setting out how costs and charges are incurred in investment portfolios, we compare the advantages and drawbacks of the commonly used Spread and Slippage methodologies, seeking to inform a common disclosure standard.

In order to strengthen retirement security for millions of Americans, we recommend a comprehensive approach that focuses on (i) expanding access to employer-sponsored retirement savings plans; (ii) increasing individual participation in retirement plans; and (iii) improving retirement outcomes through decumulation. In this paper, we outline straightforward policy actions that Congress and the Administration could take to advance these goals and make it easier for millions of Americans to plan for a secure retirement.

In light of recent congressional action to advance legislation that would roll back the SEC’s money market fund reforms, it is timely to assess the impact and effectiveness of these reforms. In this ViewPoint, we review the circumstances during the 2008 financial crisis that ultimately led to the SEC’s adoption of MMF reforms and consider the impact of these reforms. We believe the SEC should conduct a study of the effects of MMF reform before determining whether rule changes are necessary or appropriate. A roll back of the rules is not advisable without first studying the effects of MMF reforms and the implications of any potential changes.

Japan has one of the world’s highest average life expectancy at 83.7 years, but its healthcare, social security and welfare systems were designed for a society where people lived to just 70 or 80. In order to ensure adequate retirement income for all, there is urgency to supplement the public pension systems with private defined contribution plans (DC) plans and develop appropriate decumulation solutions as well as tools and technology to help people navigate the retirement planning process. In this ViewPoint, we examine Japan’s current pension system, identify areas for improvement and conclude with recommendations for the Japanese government and industry to work together to develop solutions.

This ViewPoint summarises the key financial services policy developments impacting European retail investors, institutional investors, and distributors. Important themes include financial stability, development of the European Capital Markets Union, sustainable finance, implementation of MiFID II; as well as other key issues such as retirement and taxation.

This ViewPoint examines ETF trading during the February 2018 equity market sell-off and volatility spike.

German language edition.

As policy makers are reviewing whether post-crisis regulatory reforms properly balance the objective of mitigating systemic risk without impeding economic growth, it is important to distinguish market-based finance from shadow banking. The current lack of a clear distinction can hinder regulators’ ability to fully monitor and address risk in the financial system. In this ViewPoint, we lay out a framework for differentiating shadow banking from market-based finance using a continuum that corresponds to risks, with a focus on the manner in which activities are funded and whether or not there is access to official sector backstops.

Many Americans are at risk of having limited access to retirement plans and insufficient retirement savings, particularly individuals who work for small firms. One way to encourage small employers to offer retirement plans is to make it easier for these firms to establish and maintain open multiple employer plans. In this ViewPoint, we discuss recent legislative proposals that would enable small businesses to more easily offer open multiple employer plans.

The International Financial Reporting Standards (IFRS) 17 is a complex set of accounting principles that are expected to materially impact liability measurement and profit recognition for insurance companies. We believe this is very welcome, as the current standard (IFRS 4) needs overhauling and the new standards could enhance global comparability of financial information. However, the intended objectives of IFRS 17 may not be met in full due to the complexity of implementing the new standards in a relatively short timeframe. In this ViewPoint, we outline the history and scope of international standards, describe the potential benefits of IFRS 17, and highlight possible unintended consequences on insurers, analysts and investors.

German language edition.

Index investing has profoundly changed the way investors seek returns, manage risk, and build portfolios. Although the benefits of index investing for the investor are widely recognized, recent commentary has focused on its role in capital markets. In this ViewPoint, we outline some of the key elements of the debate, focusing on index investing in relation to company stocks and the equity markets. We also examine the development of theories around common ownership, building on our March 2017 ViewPoint entitled “Index Investing and Common Ownership Theories.

In this ViewPoint, we first examine the underlying causes of the current retirement savings gap in the UK. We then look at the challenges and opportunities for individuals looking to save for retirement, and conclude with key recommendations for the Government and industry to work together to develop a range of solutions that help individuals plan more effectively for their retirement.

In this ViewPoint, we leverage behavioural and attitudinal insights from BlackRock’s Global Investor Pulse survey to examine long-term savings and investment trends in Germany. We begin by briefly setting the scene with a snapshot of the widely-acknowledged demographic factors. We then examine current barriers to achieving adequate retirement income, and conclude with recommendations for Government and industry to work together to develop a range of solutions.

This ViewPoint discusses the path forward for US housing finance reform from where we are now. We review how the housing markets have evolved and how the GSEs and their programs have changed. We expand on our guiding principles for reforming housing finance: the need for a clearly defined government role, transparency at all levels, and a framework to attract private capital. We discuss the GSE reform proposals that have been made in the context of these guiding principles, and we suggest ways to attract private capital to return to the mortgage markets.

Index funds have made broadly diversified portfolios accessible to even the smallest investor, and have become a powerful force for the democratization of investment. Recently, however, certain research literature has sought to link index investing to higher prices for consumer products and services, and has called for dramatic policy changes that could eliminate their tremendous value to investors. In this ViewPoint, we outline the benefits of index investing, the limitations of some of the research literature, and conclude by describing why some of the policy recommendations proposed would harm the average investor.

German language version

In this ViewPoint, we explain how shares are created and redeemed in ETFs. This process, known as ETF primary trading, facilitates inflows and outflows from the underlying portfolios of these mutual funds. We discuss authorized participants (APs), market makers, and the distinct roles they play in ETF primary trading. We also consider the possibility of an AP stepping back from its role and explain the expected impact on ETFs and markets.

As banking reforms come to completion, some policy makers are considering extending the perimeter of macroprudential regulation beyond banking to asset management. This has sparked a debate about system-wide stress testing, including stress tests across mutual funds and stress tests of asset managers. In this ViewPoint, we outline challenges to implementing system-wide stress testing and survey macroprudential tools that have been contemplated.

This ViewPoint focuses on the Asian bond market size, liquidity and ownership of local-currency (LC) markets. Given its increasing size and importance, the structure of the Chinese bond market is highlighted in a separate section. We outline the key parameters of the foreign (FC) markets in the region and review the rise in importance of bond ETFs as additional source of liquidity to bond investors and the potential for development of this market segment in Asia. We offer several policy recommendations to help stimulate further growth in Asia’s fixed income markets.

The dialogue on bond market liquidity has largely focused on a few key trends: (i) the decline in broker-dealer inventories, (ii) the decline in bond turnover (trading volume as currently measured divided by outstanding debt), (iii) the increase in corporate bond issuance, and (iv) the growth of bond mutual funds. While the data cited are factually accurate, these isolated data points do not present a complete picture of bond market participants or innovations that are supplementing traditional means of obtaining market liquidity. This ViewPoint is intended to inform discussions about bond market liquidity by integrating data we have known about for a long time (e.g., bond ownership by pensions and insurers) with newer data that highlights structural changes to bond market liquidity. Based on our synthesis of the new data with the old, we make a number of observations to provide a more comprehensive foundation for the dialogue on bond market liquidity.

In this ViewPoint, we make several observations and recommendations with respect to the resiliency, recovery, and resolution of central clearing counterparties.  We highlight that efforts to protect the financial system from the distress or failure of a CCP must also endeavor to protect the ultimate customers of CCPs: end-investors, such as retail savers and pension funds.  To fully achieve the risk reducing goals of central clearing, the resilience of CCPs is paramount.  In addition to focusing on CCP resiliency, financial stability would be better served by a globally consistent regime that requires each CCP to have a recovery and resolution plan that can prevent its potential failure from impacting market stability.

The 2016 U.S. election campaign has been unique in many ways, but the underlying dynamics are not. What are the implications of rising populism? The BlackRock Investment Institute breaks it down.

This ViewPoint explores the role of third party vendors in the asset management industry and catalogues a broad range of vendors that help asset managers conduct key functions. All asset managers, including both external and in-house managers, use some third party services. In addition to third party vendors, there are a variety of financial market infrastructures that all market participants rely on, including exchanges, central clearing counterparties, electronic trading and affirmation platforms, and trade messaging systems such as SWIFT. These financial market infrastructures are the spinal cord of financial markets. This paper offers some recommendations regarding guidance that should be provided to purchasers of services and suggests a framework for approaching the analysis of the providers of these services.

This ViewPoint reviews the landscape for digital advice, including the different business models present today, and the existing regulation of digital advice. Digital advisors incorporate computer-based technology into their portfolio management processes – primarily through the use of algorithms designed to optimize various elements of wealth management from asset allocation, to tax efficiencies, to product selection and trade execution. Digital advice is subject to the same regulatory requirements as traditional financial advice, including supervision by the SEC and FINRA in the US, the FCA in the UK, and equivalent authorities in other jurisdictions. That said, appropriate regulatory supervision is important, making it helpful for regulators to explore best practices in digital advice while recognizing that business models and technology will continue to evolve over time. In this ViewPoint, we suggest that regulators focus on five key areas: (i) know your customer and suitability, (ii) algorithm design and oversight, (iii) disclosure standards and cost transparency, (iv) trading practices, and (v) data protection and cybersecurity.

This ViewPoint sets out our views on environmental, social, and governance (ESG) issues from the perspective of a fiduciary investor acting on behalf of asset owners. We define different ways that investors can integrate ESG factors in the investment process, outline our views on how ESG factors contribute to long-term value, and describe the current landscape of ESG disclosure initiatives across organizations and regulatory bodies. There are a number of challenges associated with assembling and evaluating ESG information. To address these challenges, we provide recommendations for policy makers to establish a framework that enables stakeholders and market participants to develop detailed ESG standards and best-practice guidelines.

This ViewPoint explores the diversity of US bond funds and the diverse range of investments made by funds within each category. We then review data on investor flows in the largest categories of bond funds to analyze investor behavior in response to historical market stress events. We observe different flow patterns in various categories of bond funds during these periods of market stress, which suggests that bond fund investors do not treat all bond funds as a single asset class, even during times of market stress. Based on this analysis, we conclude that any macro stress test that is unable to capture the diversity of bond funds and incorporate performance of different fixed income asset classes is unlikely to produce results that are reflective of potential market dynamics, particularly if such models assume that all bond fund shareholders react in the same way in response to market stress. Stress testing of individual funds should be incorporated into mutual funds’ liquidity risk management programs.

This ViewPoint explores the Federal Housing Finance Agency’s Single Security Initiative. This initiative proposes to make the securities issued by Fannie Mae and Freddie Mac fungible, and thereby consolidate the liquid forward market in agency mortgages. We consider the benefits and challenges of the Single Security proposal and recommend steps to protect investors and facilitate market acceptance. We make a number of key observations and recommendations for a Single Security.

The SEC has laid out an agenda for modernizing the regulation of US registered mutual funds and investment advisers, which includes initiatives for collecting additional data to enhance the SEC’s existing data analytics, finalizing rules for the use of derivatives in mutual funds, introducing liquidity risk management standards and stress testing for funds, and addressing the transition of client assets in the event of an asset manager winding down. BlackRock supports the modernization of rules governing mutual funds and their advisers, and we have commented on specific aspects of the rules proposed thus far. In this ViewPoint, we discuss each of the SEC's proposals and we lay out some guiding principles for considering the proposals as an integrated package.

In this ViewPoint, we describe the current environment for infrastructure investing and propose a holistic policy framework that recognizes investors’ requirements for investing in infrastructure.  This policy framework is built on four key principles: (i) providing certainty to investors, (ii) focusing on transparency, (iii) determining funding structures that align the interests of investors and public authorities and (iv) developing a stable and consistent regulatory environment.  This paper also discusses some of the existing regulatory barriers to infrastructure investment and provides suggestions to address them.

This ViewPoint reviews key federal retirement initiatives and several state proposals in the US that aim to increase retirement savings. We offer suggestions on how the federal government can eliminate unnecessary obstacles small employers face in establishing and maintaining ERISA plans and we discuss state-based programs intended to increase coverage for private sector employees. We recommend moving forward with achievable changes to facilitate both public and private sector retirement solutions. All solutions should make it easier for employers to establish a plan or IRA program, encourage and facilitate continuous and increasing levels of retirement savings starting at an early age, and support well-designed investment programs.

The OECD's Base Erosion and Profit Shifting (BEPS) is the international community’s attempt to curb aggressive tax planning. In this ViewPoint, we explain that the proposed rules may inadvertently affect cross-border investment flows, thereby reducing the ability for capital markets to contribute to economic growth and the investment opportunities of end-investors. We suggest recommendations consistent with the BEPS project's main goals while minimizing potentially adverse side effects on commingled investment vehicles.

The Capital Markets Union project, announced in July 2014 by EU Commission President Juncker, seeks to remove barriers to the free flow of capital in Europe, and increase the role that market-based finance plays in intermediating capital to European companies, projects and governments. In this ViewPoint, we set out our thinking in the areas we believe are fundamental to its success.

This ViewPoint is the 2014 edition of our overview and analysis of key EU regulatory developments affecting the European financial markets and investors. Topics covered range from investment products and investor protection, through to market structure, investment allocation and taxation.

Policymakers are keen to stimulate securitisation markets in the European Union in order to increase the range of financing opportunities available. This ViewPoint seeks to provide a brief overview of securitisation and highlights its benefits for companies, investors, banks and the economy. It also identifies some of the misuses of securitised instruments and the degree to which industry practice and regulation have addressed concerns and recommends guiding principles to stimulate the re-emergence of healthy securitisations.

We detail scenarios, risks and investment opportunities before and after the US elections, with a focus on the “fiscal cliff.”