The Fed on Tuesday asked BlackRock to buy tens of billions of dollars worth of bonds with the central bank. The assignment is probably related to the fact that the world's largest fund manager has some experience in buying bonds, including the world's largest bond market ETFs.
Under the mandate, BlackRock will purchase commercial mortgage-backed securities, which will be determined by the Fed among the Fannie Mae, Freddie Mac and Ginnie Mae-backed securities.
In addition, BlackRock manages two major bond purchase programs, one to buy newly issued corporate bonds issued by US companies and the other to buy corporate bonds that have already been issued.
BlackRock's mandate is very significant, as the US Treasury Department plans to support both bond purchase programs with $ 10 billion in first-round equity funding. If you buy BlackRock ETFs as part of your assignment, you must be careful not to take a share of more than 20% in any ETF.
THE article According to the commission, the fund manager, who has nearly $ 7 billion in assets, is in a state of controversy, so the big question is how to handle the resulting conflict of interest. What is certain is that BlackRock will work with the Fed, not through its fund management business, but through its financial market advisory area, which advises several governments on how to manage their finances, including assisting with investments and downsizing toxic assets. .
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