Several of the world's biggest banks are setting up a multi-billion pound fund in an attempt to prevent potentially toxic mortgage securities poisoning the wider financial markets, reports The Guardian .
According to reports, Citigroup, Bank of America and JPMorgan are prepared to offer credit guarantees worth £37bn to the scheme, which would buy up assets that are backed by mortgages. Further details of the initiative, called the Single-Master Liquidity Enhancement Conduit (SMLEC), are expected later today. The fund, which has been compared to a bail-out for the financial sector, is a response to the US sub-prime crisis and its impact on the global economy. While "stability" and "prudence" might be two of Gordon Brown's favourite words, the Prime Minister (and former Chancellor) has ups...
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