BlackRock to the rescue, hired to sell $114 billion worth of failed bank securities

BlackRock Inc., the world’s largest asset manager, has been hired as an adviser to help the US government arrange the sale of $114 billion in securities that were held by failed lenders Signature Bank and Silicon Valley Bank.

According to the Federal Deposit Insurance Corp. (FDIC), BlackRock will conduct the sales of $27 billion in securities from Signature and $87 billion from Silicon Valley Bank.

The holdings are mostly agency mortgage-backed securities, collateralized mortgage obligations, and commercial MBS, the agency said.

While the sale of these securities may seem like a daunting task, the FDIC has noted that the sales “will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions.”

It’s no secret that Signature Bank and Silicon Valley Bank have been struggling as of late, with deposit withdrawals causing their collapse.

This move by BlackRock aims to not only benefit the government and the FDIC but also the economy as a whole. By selling these securities in a gradual and orderly manner, the potential for any adverse impact on market functioning is minimized.