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With the three largest U.S. banks reaching agreement on a new $80 billion fund aimed at reviving the market for short-term debt, criticism appears to be mounting that the new fund itself may be flawed or may create more problems than it solves.

Citigroup (NYSE: C), the Bank of America (NYSE: BAC). and JPMorgan Chase (NYSE: JPM), the three largest U.S. banks, have reached an agreement on the structure of an $80 billion fund to help revive the market for short-term debt, a person familiar with the talks said, Bloomberg News reported.

The banks want to establish the fund, called the "Super SIV" or master liquidity enhancement conduit ("M-LEC"), as a way to obtain short-term credit to finance high risk / high-yield investments in subprime mortgage loans. The fund would buy some of the $320 billion in assets held in structured investment vehicles, or SIVs. SIVs typically borrowed money to invest in longer-term investments, like subprime mortgages.

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'Super-SIV' may not be so super originally appeared on BloggingStocks on Wed, 14 Nov 2007 15:33:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBankofAmericaBernankebond marketCCitigroupcredit crunchdebtGreenspanhousinginthenewsJPMJPMorganChaseM-LECmortgagesSIVStructured Investment Vehiclessubprime mortgagesSuper SIVU.S. Federal ReserveU.S. TreasuryWed, 14 Nov 2007 15:33:00 EST