Larry Fink, who runs the world’s largest asset manager, isn’t calling for a sharp correction in global markets, but he sees how one could happen.
The BlackRock Inc. chief said a political event could cause “a pretty large setback” and that if volatility rose to normal levels, there could be as much systemic risk as in 2007, the early days of the financial crisis. Fink illustrated a possible major political event with the example of Richard Nixon’s resignation in 1974 following the Watergate scandal.
“I am just saying if there is a major event, which I don’t foresee, but if there is one, we could have a big correction,” Fink said during a panel discussion Friday at the annual meeting of the Institute of International Finance in Washington.
The CBOE’s Volatility Index, or VIX, fell to a record low earlier this month.
— Check out Stock Strategists Are Getting Nervous About the Market on ThinkAdvisor.