Governments and private-sector partners may have to spend as much as $2 trillion to rescue Europe’s banks, said Laurence D. Fink, the chairman and chief executive officer of BlackRock Inc. (BLK)
“Stabilizing Europe is very costly,” Fink, who heads the world’s largest asset manager, said today during an event in Toronto. “It could be as much as a couple trillion dollars.”
World equity markets have plunged over the past two months amid concern the European debt crisis is intensifying. The International Monetary Fund cut its forecast for global growth last month and predicted “severe” repercussions if Europe fails to contain its debt crisis or U.S. policy makers deadlock over a fiscal plan.
Fink said his firm has purchased equities this week including Morgan Stanley (MS), after the MSCI All-Country World Index slumped 22 percent between May 2 and Sept. 30. BlackRock oversaw $3.66 trillion in assets as of June 30.
A European rescue program would be more of an investment opportunity than a bailout, Fink said today. On Sept. 14, he recommended a $1 trillion plan similar to the U.S. Troubled Asset Relief Program. He said today that he envisioned Europe needing an additional $1 trillion public-private partnership.
Bloomberg
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