Based on a study by the Office of Financial Research of the asset management industry, the Financial Stability Oversight Council will study whether BlackRock and Fidelity pose risks to the financial system. The OFR study’s claim that asset managers could pose a systemic risk has been roundly criticized in comment letters.

In its comment letter, Better Markets takes OFR for studying asset managers when it should be targeting the well-known and still-unresolved systemic risks inherent in our overleveraged, undercapitalized, and too often unregulated banking system. Senator Jack Reed, a key architect of the statute that created OFR, voiced concerns with the study through a spokesperson: “OFR is supposed to be a data driven, thorough research entity. Senator Reed shares the concerns of Better Markets and others, that any OFR report needs to meet the high threshold for quality that was intended by the statute.”