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Banks reportedly agree on credit backup fund

JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. have agreed on a simpler structure for a $75 billion fund to steady credit markets, The New York Times reported Sunday, citing a person close to the talks.
/ Source: The Associated Press

JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. have agreed on a simpler structure for a $75 billion fund to steady credit markets, The New York Times reported Sunday, citing a person close to the talks.

Under the agreement, pools of assets or structured investment vehicles won't need the approval of at least 75 percent of their investors to participate, the newspaper said in a report published on its Web site. The fund also will assign the same risk level to all securities in the SIVs.

The fund could start operating before next year, the person that the newspaper cited said, and the banks could be asking financial institutions to contribute as soon as Friday.

The fund could restore some liquidity to the market for asset-backed securities by establishing a buyer, even if no SIV uses it, the newspaper said.