What Is an Asset Specialist?

An asset specialist is a professional who is responsible for the management and disposition of assets of a financial institution. Asset specialists are used when a financial institution is under government conservatorship, and they also work with other financial institutions that are marketing and selling assets.

Asset Specialists Explained

When a bank or other financial institution is placed into conservatorship, regulators appoint a managing agent who takes over the duties of the bank’s board of directors. During this time, many of the bank’s employees may retain their positions, although the managing agent is ultimately in charge of operations.

The managing agent is placed in charge of one or more asset specialists, who are tasked with the collection of information relating to the bank’s assets. Asset specialists are employees of the regulatory body that has taken over the failed bank.

Understanding the bank’s assets is vital under conservatorship, as the goal of the regulatory body is to dispose of the assets as quickly as possible while recovering as much of the value of the assets through sales as possible. Regulators want failed banks to be liquidated quickly and value recovered in order to maintain depositor confidence, keep the financial system operating properly, and protect the overall economy from after-shocks caused by bank failures.

Asset specialists serve in an investigatory and research capacity, piecing together the puzzle a failed bank left behind in terms of how much it has loaned out, who took on those loans and when those loans are due.

Key Takeaways

  • When a bank or other financial institution is placed into conservatorship, regulators appoint a managing agent who takes over the duties of the bank’s board of directors.
  • An asset specialist is a professional who is responsible for the management and disposition of assets of a financial institution.
  • Asset specialists serve in an investigatory and research capacity, piecing together the puzzle a failed bank left behind.

Real World Examples of Asset Specialist

During the savings and loan failures of the 1980s and early 1990s, asset specialists provided oversight of the asset managers hired by the Federal Deposit Insurance Corporation (FDIC) and Resolution Trust Corporation (RTC). Private sector contractors served as the asset managers, and were charged with portfolios of assets that they needed to sell off. Asset specialists helped determine the value of the portfolio assets and monitored the percentage of asset values that were recovered.

In more recent years, asset specialists and asset managers were employed in a similar function during the fallout from the 2008 U.S. credit crisis and subsequent global financial crisis. Specialists were brought in when the housing crisis erupted and Fannie Mae and Freddie Mac nearly imploded. The two loan behemoths were put under government conservatorship in 2008, under the auspices of the Federal Housing Finance Agency (FHFA). The conservatorships allowed for government intervention in response to financial pressures from the deterioration of the housing market.

As the financial crisis continued to unfold, asset specialists and asset managers were brought in to assist the government in the wake of over 25 banks being seized and shut down, including such major institutions as Washington Mutual. In September of 2008, the FDIC seized Washington Mutual's assets and arranged a deal to have JPMorgan buy the failed bank for $1.9 billion. IndyMac was another of the 2008 closures, with both banks ranking among the biggest bank failures in history.