BLACKROCK, INC. 
WASHINGTON (Reuters) - BlackRock Inc (>> BlackRock) Chief Executive Officer Larry Fink warned on Friday that financial markets are ignoring underlying risks, which means there could be a "big correction" if a major surprise world event occurred.
Fink, head of the world's largest asset manager, said the amount of risk in the financial system is comparable to 2007 levels. He said that consistently low volatility in the stock market, as well as the overall strength of the global economy, may mean markets are not accounting for that risk as much as they did in the past.
“If there is a major event, which I don’t foresee anything, but if there is one, we could have a big correction," he said at the annual meeting of the Institute of International Finance.
All three major U.S. stock indexes have been on an extended rally this year, repeatedly setting new record highs, as investors anticipate expanded business activity thanks to a lighter regulatory road and potential tax cuts.
A stock market correction is defined as a fall of at least 10 percent from the high point of the last 52 weeks.
Fink spoke during a panel discussion alongside the CEOs of JPMorgan (>> JP Morgan Chase & Company) and Morgan Stanley (>> Morgan Stanley) - Jamie Dimon and James Gorman. All three were generally optimistic about the economy, although they highlighted several significant risks.
Fink said there is no evident economic reason for a major spike in volatility in the near future.
"Over the long horizon, I think the world is a great place to be," he said.
But all three CEOs found ample room to criticize the White House and the U.S. Congress for failing to take any major steps to boost the nation's economy.
Dimon said the steady if not spectacular U.S. economic growth has occurred "in spite" of the failure in Washington to act.
"We have got to get our act together," he said, adding that the United States needs to spend more on infrastructure.
The three also emphasized the importance of cutting the U.S. corporate tax rate - something that President Donald Trump has been promising as part of his tax plan - warning that a failure to do so by Congress could upend the strong run in the U.S. stock markets in 2017.
"If nothing gets done on the corporate tax, that'll be a big disappointment," warned Gorman. "That'll take a lot of energy out of the market."
On economic policy, Fink said he believes Trump has considered well-qualified candidates to serve as the next chair of the Federal Reserve to succeed Janet Yellen, whose term expires in February. He said he hoped the next central bank head would continue the "glide path" on gradually raising interest rates established by Yellen.
And one day after vowing never to address the topic again, Dimon again assailed bitcoin, the cryptocurrency which he previously called a "fraud."
People who invest in it "stupid" and will "pay the price someday," Dimon said. He did identify some value in blockchain technology, which underpins bitcoin, but said that any completely anonymous cryptocurrency not backed by any government will not last forever.
"Governments are going to crush [bitcoin] one day," Dimon said. "Governments like to know where the money is, who has it, and what they're doing with it."
(Reporting by Pete Schroeder; Additional reporting by Michelle Price; Editing by Jonathan Oatis and Leslie Adler)
By Pete Schroeder
