Banks said to agree on $75B credit fund: report
Agreement would end months of complicated negotiations as economic conditions deteriorate, according to The New York Times
NEW YORK (CNNMoney.com) -- The nation's three biggest banks have agreed on the structure of a backup fund of at least $75 billion in an effort to help stabilize the credit markets, according to a person involved in the discussions, The New York Times reported Saturday.
Representatives from Bank of America (Charts, Fortune 500), Citigroup (Charts, Fortune 500) and J.P. Morgan Chase (Charts, Fortune 500) reached an agreement on a simpler plan late Friday, according to the Times. Previous versions in the two nearly two months of negotiations had been considered unfeasible.
The proposed fund could begin operating by the end of the year, and the banks would start to ask about 60 financial institutions to contribute to it by Friday or early next week, the Times reported.
The group of banks have said they created the fund to buy shaky mortgage-backed securities.
While it doesn't change the fundamental problem facing the mortgage market - rising delinquencies on subprime mortgages - the fund could increase confidence in some better-quality mortgage-related debt.