The Big Three – Vanguard, Blackrock, & State Street

The FDIC (Federal Deposit Insurance Corporation) is investigating Vanguard, Blackrock, and State Street over their large investment stakes in major US banks. The trio of asset managers, which collectively manage some $23 trillion, are among the top registered stakeholders in the four major US banks: JPMorgan Chase, Bank of America, Wells Fargo, and CitiBank. Blackrock and Vanguard each hold stakes in some of the banks above 10%, or enough to typically be considered a party with a controlling interest in a lender.

All three firms have agreements with regulators — Vanguard and Blackrock with The Fed, and State Street with the FDIC — to remain passive investors, essentially vowing to not exert their influence outside of shareholder elections. But that passivity is more or less self-policed.  Concern doesn’t stop at the banks. The three firms control more than one-fifth of the votes of the companies in the S&P 500, or more than any three entities have held in history. Indeed, there’s a reason they’re so often called “The Big Three.”