Premium – 57. The Arbiters of Asset Allocation

We pick back up on our discussion of market indices and index providers, honing in on the close relationship they have with asset managers, how they exercise private authority by setting standards for corporate governance and evaluating the worthiness of “emerging markets,” and the need to reckon with the authority these kingmakers of finance—these arbiters of asset allocation—have in the world today. Who gave them this great power? Not me! Not you! And yet, here they are, with the ability to wave a wand, change a classification, and magically, instantly, automatically make billions of dollars move from one place to another.

Article we discuss:

• Steering capital: the growing private authority of index providers in the age of passive asset management | Johannes Petry, Jan Fichtner, Eelke Heemskerk | Review of International Political Economy: https://www.tandfonline.com/doi/full/10.1080/09692290.2019.1699147

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