(1888PressRelease)
November 17, 2007 - London, Monday, -- ARANCA NEWSTRACK -- (www.aranca.com)
The largest three banks in the US have approved a simpler structure for a planned back-up fund to help stabilise the credit markets.
JP Morgan, Citigroup and Bank of America should now be able to start signing up other banks to the $75 billion superfund within the next ten days, the Financial Times reports.
Under the terms of the new admission policy, pools of assets or structured investment vehicles (SIVs) will be no longer need approval of 75 per cent of their investors to participate in the scheme.
The proposals must now be ratified by credit rating agencies and senior staff at the banks, with hopes high that the fund could be operational by the middle of December.
An unnamed source told the FT: "There has been very strong progress. It looks like a term sheet could come late next week or early the following."
The superfund will work through offering to buy assets from SIVs - which are experiencing difficulties funding themselves through commercial paper sales to investors concerned about their level of exposure to sub-prime mortgage securities.
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