Larry Fink on Guiding BlackRock Through the Financial Crisis

We’ve always been this odd duckling. When we started in 1988, we felt risk management was important. Very few people understand the risks they’re taking. It doesn’t mean avoiding risk. It means understanding what you’re taking on. We began talking about the credit bubble in 2006. You knew it would blow up, but you didn’t know if it would explode in two weeks or 10 years. We were wrong in terms of timing.

The most difficult thing I’ve done was signing a check for $13 billion-plus for Barclays Global Investors. It was spring of 2009, and we had just bought $1.8 trillion of equities. We’d never made a bet that big. In March the market had hit lows of 6400. Bank of America hit $3 a share. Citigroup was below a dollar. There were conversations in the press about the nationalization of the banking system. If that had happened, it would have been a very bad moment in American history.