The Federal Deposit Insurance Corporation (FDIC) has chosen BlackRock Inc’s Financial Market Advisory to manage the sale of the securities portfolios it retained after the collapse of both Signature Bank and Silicon Valley Bank. The face values of the two portfolios amount to roughly $27 billion and $87 billion, according to a statement released by the regulator on Wednesday.
FDIC was seeking advisers to sell the securities portfolios, which were rejected by the new owners of the two banks. The marketing process for a $60 billion loan portfolio, held in receivership following the failure of Signature Bank, was announced by the FDIC on Monday.
The securities in question primarily consist of agency mortgage-backed securities, collateralized mortgage obligations, and commercial mortgage-backed securities, as detailed by the FDIC on Wednesday.
The recent collapse of Signature Bank and Silicon Valley Bank has sparked the most significant banking crisis since 2008, fueling heavy volatility in the sector and exacerbating existing fears of an impending recession. As the FDIC moves forward with the sale of these securities portfolios, the outcome of this process will be closely watched by investors and regulators alike.