Fink, head of the world's largest money manager overseeing $3.6 trillion in assets, said he was still bullish on U.S. equities but warned that the stock market could lose 5 to 10 percent in a correction in the final months of the year.

"The next three to four months we are going to probably have greater uncertainty and the market may test itself one more time," Fink told Reuters during a trip to Tokyo, host to this week's semiannual meeting of the International Monetary Fund.

Behind those jitters is uncertainty over when and how Spain, the latest epicenter of the euro zone debt crisis, might seek financial aid as it struggles with a huge budget gap, soaring debts and the need to reform its economy, Fink said.

But for all of the troubles facing Europe, Fink said just as much time was spent at the IMF meetings talking about the so-called fiscal cliff of expiring tax cuts and looming spending cuts that will hit the U.S. economy early next year unless congress acts.

Failure to come up with a solution could knock U.S. gross domestic product in the first quarter to a 3 percent annual rate of contraction, Fink estimated, based on the current run rate of 2 percent annual growth. That risk is already hurting the economy with CEOs reining in spending and reluctant to hire workers, he said.

On the other hand, a solution could trigger a substantial rally in equities and set the stage for a stronger economy, underpinned by a recovering housing market and a banking system now sound due in part to post-crisis reforms, he said.

FINDING GROWTH

Fink dismissed the notion that New York-based BlackRock, whose assets under management are equal to the size of the German economy, may struggle to continue delivering growth.

While BlackRock will not pursue large acquisitions, it is considering a couple of "fill-in" deals, he said, adding that one would be similar to its purchase earlier this year of Claymore Investments Inc, a Canadian provider of exchange traded funds (ETFs).

Fink also pointed to the potential for growth in actively managed funds, where it is still smaller than a handful of its rivals, while it wants to boost its business providing institutional clients with "solutions" that address specific investment requirements.

Fink said 62 percent of his company's clients are currently only turning to BlackRock to manage one product.

"Just think if I could expand that mindshare and help my clients and now have two products with 62 percent of my clients."

One of Fink's biggest challenges is to fend off the advance of rival Vanguard Group, which has been chipping away at BlackRock's 40 percent share of the $1.2 trillion U.S. ETF market by offering lower fees.

BlackRock said a month ago that it plans to cut fees on some of its core iShares ETFs. Fink said he would be unveiling a strategy for bolstering its ETF business on Monday, two days before the company is due to announce third-quarter results, but did not elaborate on the contents of Monday's announcement.

Earlier this year, BlackRock unveiled an overhaul of its management structure that expanded its global executive committee to 21 from 13.

Worries have mounted about the strength of BlackRock's management bench amid persistent speculation that Fink may be a candidate to replace U.S. Treasury Secretary Timothy Geithner if President Barack Obama is re-elected.

Fink said he was not giving the prospect much thought.

"Unfortunately for my life right now my future is being discussed more than I'm thinking about it," he said. "I expect to be here, I want to be here, I intend to be here for many more years."

Succession scenarios for Fink and other senior positions were discussed at an annual board retreat last week to take stock of the company's talent pool and identify future leaders, Fink said.

"I leave the room when they talk about me. That's between the head of HR and the board," he said.

(Additional reporting by Peter Thal Larsen; Editing by Edmund Klamann)

• A Permanent Economic Emergency