Larry Fink, CEO of BlackRock, published an article in the Financial Times outlining his concept of 'Globalization 2.0.' This new idea aims to redirect citizens' funds toward local infrastructure projects.
What is 'Globalization 2.0'?
Larry Fink notes that the first globalization led to multiple issues, including rising wealth inequality. He criticizes economic nationalism and tariffs introduced by President Trump as insufficient measures. Fink advocates for an approach that combines open markets, national benefits, and protection for local workers.
BlackRock's Strategy and Goals
BlackRock plans to utilize local savings for financing infrastructure and initiatives related to environmental, social, and governance (ESG) goals. Fink cites Japan as an example where tax changes encourage investments in pension funds. He also emphasizes the need for a unified capital market in Europe.
Risks for Investors
One of the main concerns with the proposed investments is the illusion of liquidity. The invested capital may be locked up for many years, presenting risks for investors. Fink warns that if capital massively flows into these investments, it may result in disproportionately higher bond yields, making them more appealing to savers.
BlackRock's strategy of 'Globalization 2.0' raises critical questions about the future of the financial system. With growing debt and a lack of financing from governments, private asset managers are becoming key players on the global stage.
