BlackRock's Urgency to Sell Assets of Failed Banks.

BlackRock, chosen by the Federal Deposit Insurance Corporation (FDIC) to sell mortgage backed securities (MBS) from failed banks, faces a dilemma between flooding the market and risking higher costs to hold the debt. While the FDIC hasn't given a timeline for the sales, it can't wait forever as it's paying the Federal Reserve interest on credit lines to hold the securities. The longer the assets are held, the less liquid and more off-the-run they become, and the FDIC needs the cash to pay for things like reimbursing depositors from the receiverships. The amount of supply is formidable, with roughly $90 billion in market value of the securities that BlackRock now needs to dispose of, far more than the gross supply of agency MBS last month at $56 billion.