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August 29, 2014updated 04 Apr 2017 2:03pm

European Central Bank appoints BlackRock to buy asset-backed securities

The European Central Bank (ECB) has appointed the advisory arm of BlackRock Solutions to provide consultancy services to design a programme to buy asset-backed securities (ABS).

By Verdict Staff

The European Central Bank (ECB) has appointed the advisory arm of BlackRock Solutions to provide consultancy services to design a programme to buy asset-backed securities (ABS).

BlackRock has been selected to advice on the design and implementation of a potential ABS purchase scheme.

However, all final decisions will be taken by the ECB itself

The move follows the regulator’s plans to ease credit conditions in the eurozone.

This year, BlackRock Solutions was hired by the Greek central bank to investigate the balance sheets of its four big banks and also worked with the Bank of Ireland during the euro zone debt crisis.

ECB president Mario Draghi said that the central bank’s plans for outright purchases of ABS were fast moving forward and it anticipates that it should contribute to further credit easing.

Under the ABS purchase scheme, banks will receive loan revenues from assets such as mortgages or credit cards and combine them for sale to fixed-income investors. The scheme will also provide incentives for lending to credit-starved businesses.

Additionally, the Irish Central bank has hired BlackRock as a consultant to examine its books, including a review of its commercial real estate loans and also The Bank of Greece has appointed BlackRock to perform an asset quality review to resolve credit losses up to 2016.

As of 20 June 2014, Blackrock had nearly $4.6 trillion (EUR3.49 trillion) in assets under management.

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