Following years of benign economic conditions, and the consequent expansion of credit boundaries and funding methods, 2007 abruptly forced financial institutions to refocus on risk and balance sheet management.
The Advisory practice within BlackRock Solutions has been at the center of this storm, helping clients not only to navigate through the crisis but also to take advantage of the emerging opportunities presented by market dislocation. We helped clients revise their financial strategies in light of new constraints on funding, reductions in available capital and weakened balance sheets. We valued distressed structured finance and mortgage portfolios for leading financial institutions, and helped dispose of or workout those assets. And we advised clients on how to improve their risk management frameworks after stressed markets highlighted inadequacies in risk reporting.
Beyond the market turmoil, the Advisory practice has helped balance sheet-driven firms across the financial services industry deal with the inherent difficulties they face in the capital markets. Senior management and boards of directors engage BlackRock Solutions on central corporate strategy decisions for their capital markets businesses.