The accusation of the head of BlackRock: “The crisis of Svb? We are paying the price of easy money”

TURIN. Larry Fink’s letter to investors is a well-established appointment in the world of finance. And this year, in the light of a decidedly convoluted macro context (ignited by the collapse of the Silicon Valley Bank), it attracts even greater interest. In about 20 pages, the co-founder and president of the financial giant BlackRock comments on the context in which investors find themselves navigating, analyzes the trend in inflation, the rise in interest rates and the stress on the banking sector, but also addresses issues related to the development of increasingly fragmented economies, to greater protectionism and polarisation. These issues, coupled with rising geopolitical tensions, have brought national and economic security into the spotlight and will have significant implications for how asset owners choose to allocate capital and design durable portfolios. Fink explains how public and private sector leaders are “trading” efficiency and cost reductions for supply chain resilience and national security.

This trade-off between prices and safety is one of the reasons why, «I believe that inflation will persist and that it will be more difficult for central bankers to tame it. As a result, I think it more likely that inflation will approach 3.5% or 4% in the next few years.’ Among the major topics covered in the letter, the president of BlackRock talks about the interest rate race and the Svb case: “We pay the price of easy money”: The case of Silicon Valley Bank represented a classic mismatch between assets and liabilities. And it is not yet clear whether it was a one-off event or there will be the classic domino effect.