The Central Bank of Ireland hired BlackRock Solutions to value hard-to-sell debt held by the country’s banks as European regulators attempt to resolve the sovereign debt crisis.
BlackRock Solutions will price the assets of six banks as part of a review of capital requirements, the Central Bank of Ireland said Thursday in a statement. Boston Consulting Group will help with project management, and the investment banking unit of Barclays will provide banking advice, the Dublin-based central bank said.
BlackRock’s assignment marks the first time the firm is advising a European government in connection with the region’s debt crisis, which started last year when Greece needed a bailout. BlackRock Solutions, the unit that evaluates mortgage bonds and hard-to-sell securities, was picked by the U.S. government in 2008 to oversee tainted portfolios at the peak of the financial crisis and value assets previously held by American International Group and Bear Stearns.
Ireland on Nov. 28 was forced to resort to an €85 billion ($111 billion) aid package led by the European Union and the International Monetary Fund after bailouts of lenders such as Anglo Irish Bank Corp.
As part of the aid, Ireland’s central bank agreed to reduce the size of its loan portfolios by “steadily deleveraging” the banking system. After establishing an asset management agency last year to dispose of about €71 billion of commercial real estate loans, the central bank is considering starting a second one to explore a restructuring of the debt.
The BlackRock Solutions unit specializes in assigning values to and measuring risk in bond portfolios, especially those that have illiquid securities and mortgage-related debt.
Bobbie Collins, a BlackRock spokeswoman, confirmed that the firm was appointed by the Central Bank of Ireland but declined further comment.
