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Regulator probes BlackRock and Vanguard over huge stakes in US banks

FDIC examines whether investment firms stick to passive investing mandate

Jonathan McKernan, a board member of the Federal Deposit Insurance Corporation, says he has a plan to enhance the FDIC’s monitoring of the index fund firms
Jonathan McKernan, a board member of the Federal Deposit Insurance Corporation, says he has a plan to enhance the FDIC’s monitoring of the index fund firms Photo: Getty Images

Banking regulators are scrutinising whether index fund giants BlackRock, Vanguard and State Street are sticking to passive roles when it comes to their investments in US banks.

The three firms manage more than $23tn in total, with much of it in funds that passively mimic indexes such as the S&P 500.

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