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Top Institutional Investors Driving Increased Market Volatility: Study
Some of the biggest financial firms are causing excess market volatility and leading to mispricing of company stock, according to a recent analysis. So reports The Financial Times. Those firms are BlackRock, Capital Group, Vanguard, Fidelity and State Street.
Trading behavior of these firms and the concentration of ownership has led to this volatility. The top 10 biggest institutional investors own more than 25% of the U.S. stock market.
This renews the question into whether these firms should classified as “systemically important financial institutions” alongside the big banks. That would involve increased regulatory scrutiny, increased costs and reduced profits.
Read the full article from The Financial Times.