FDIC taps BlackRock to sell failed bank portfolios

By James Langton | April 5, 2023 | Last updated on April 5, 2023
1 min read

The U.S. Federal Deposit Insurance Corporation (FDIC) has hired BlackRock Financial Market Advisory to gradually sell off the securities portfolios of two recently-failed banks, New York’s Signature Bank and Santa Clara, Calif.-based Silicon Valley Bank (SVB).

The FDIC retained the securities in its role as receiver for the two banks, which failed last month.

On March 26, First Citizens Bank & Trust Co. acquired SVB’s assets at a discount, but the securities portfolio remained with the FDIC.

The portfolios are primarily comprised of comprised of mortgage-backed securities and collateralized mortgage obligations.

The agency said that SVB’s portfolio has a face value of US$87 billion, and Signature Bank’s portfolio is valued at US$27 billion.

BlackRock will now be charged with selling off the securities holdings in a process that the FDIC said “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.”

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.