The chief executive of US asset manager BlackRock has warned that the credit crunch will "get a lot worse" as financial institutions continue to hold potential losses in illiquid assets and do not make their losses clear.

At an investor meeting yesterday, BlackRock chief executive Larry Fink said: "I do believe that there are many institutions who do not understand what this credit crunch is going to do to their earnings and balance sheet. There are many financial institutions that are not marking down their assets because they are held to maturity."