Larry Fink has an interesting take on what constitutes a conflict of interest on Wall Street.

The BlackRock chief executive presides over a behemoth that has played an ever-growing role in managing troubled assets taken on by the federal government during the heat of the financial crisis.

Yet Fink scoffs at the notion that BlackRock’s position as the government’s investment manager of choice poses any conflict with the firm’s role as a manager of assets for pension funds, private endowments and institutional investors.

Fink, speaking today at a breakfast meeting sponsored by The Wall Street Journal, said there’s no potential conflict of interest between BlackRock’s role as a money manager for the government and private investors, as long as the firm doesn’t engage in proprietary trading.

Simply put, Fink suggests the risk of a conflict arises only when an investment firm uses market information it has gathered from clients as the basis for making its own trades and with its own capital.

That’s a rather narrow view of what constitutes a potential conflict of interest. Fink apparently discounts the information advantage that BlackRock gets from its extensive government work — which also includes assignments for several foreign governments — and how that may put the money manager in a better position than its competitors to make investment decisions.

There’s no denying that BlackRock has gained invaluable insight into the market for distressed mortgage-backed securities and commercial real estate loans from the firm’s role as manager and advisor to the Federal Reserve and the U.S. government.

BlackRock is responsible for managing some of the worst securities and other assets that were gumming up the balance sheets of Bear Stearns, American International Group, Fannie Mae and Freddie Mac.

From its unique vantage point, BlackRock can assess better than most other firms the contours of the bottom of the housing and commercial real estate market. And that should enable BlackRock to make better investment decisions for all of its clients, both private and public.

That’s certainly good news if you’re a BlackRock customer. It’s also good news for BlackRock executives, because the better the performance posted by the firm’s many investment funds, the more revenue BlackRock takes in from management fees.

But a BlackRock competitor could rightly argue that the federal government is giving too much of an information advantage to one firm — no matter how good a reputation that firm may have.

Fink could counter that nobody at BlackRock is forcing the government to keep hiring the firm. The federal government could simply look elsewhere the next time it’s in need of a clean-up crew.

More to the point, it would bolster Fink’s credibility as one of the few statesmen left on Wall Street if he would simply acknowledge that BlackRock has gained something more than just advisory fees from serving as the government’s go-to money manager.