Eric Lipton of The New York Times has a fascinating tale of Washington and Wall Street getting perhaps a little too cozy for their own good, detailing how BlackRock and Goldman Sachs went out of their way to try make themselves, er, ah, useful to Charles Millard after he was appointed by President Bush to run the Pension Benefit Guaranty Corp. The clear implication is that the attention the firms gave to Millard was intended to help win contracts managing billions of dollars in retirement funds.
Like most of the City of London, I’ve been fascinated with Amanda Staveley for some time. Ever since she burst onto the scene last autumn as the go-between in the 3.5 billion pound investment in Britain’s Barclays by Sheikh Mansour bin Zayed al-Nahyan, the Abu Dhabi prince, she has sparked admiration and scepticism in equal measure.
The BlackRock Inc. chief executive avoided taking over the helm of Merrill Lynch — something John Thain probably wishes he had done. Fink’s firm emerged from the financial crisis as the Federal Reserve’s favorite private money manager, with BlackRock getting the lion’s share of the government’s work for managing troubled assets. And the $13 billion deal Fink just reached with Barclays Global Investors has turned BlackRock into the outright titan of the asset management world with $2.7 trillion in other peoples’ money under management.
It’s pretty clear the Federal Reserve is going to emerge as the big winner in the Obama administration’s proposed overhaul of the financial regulatory system. But any grant of new powers to the Fed must come with legislation requiring greater accountabilty from the nation’s central banker.