Here is the Sunday night news release in which 10 major global banks announced a $70 billion loan program to help to help keep troubled financial institutions afloat:
Consortium of Global Commercial and Investment Banks
Takes Series of Actions to Help Enhance Liquidity
and Mitigate Unprecedented Volatility in Capital Markets
NEW YORK, September 14, 2008 — A group of global commercial and investment banks,
including Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman
Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS, today initiated a series of
actions to help enhance liquidity and mitigate the unprecedented volatility and other
challenges affecting global equity and debt markets. Specifically, the banks are working
together to do the following:
• First, to assist in maximizing market liquidity through their mutual commitment to
their ongoing trading relationships, dealer credit terms and capital committed to
markets.
• Second, to establish a collateralized borrowing facility, which ten banks (Bank of
America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP
Morgan, Merrill Lynch, Morgan Stanley, and UBS) have committed to fund for $7
billion each ($70 billion in total). The facility will be available to these participating
institutions for liquidity up to a maximum of one-third of the facility for any one
bank. It is anticipated that the size of the facility may increase as other banks are
permitted to join the facility.
• Third, to help facilitate an orderly resolution of OTC derivatives exposures between
Lehman Brothers and its counterparties. This effort included opening the OTC
derivatives market for trading this Sunday afternoon.
These cooperative efforts will be enhanced by the Federal Reserve Board's decision to accept
expanded classes of collateral under the Primary Dealers Credit Facility, including equities.
All participating banks intend to utilize this facility beginning this week.
These actions reflect the extraordinary market environment. The banks are committed to
continuing to work closely with one another as well as the U.S. Treasury Department, the
Federal Reserve, the Securities and Exchange Commission, governments and regulators
around the world, and other market participants, to ensure the industry is doing everything it
can to provide additional liquidity and assurance to our capital markets and banking system.
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Banks form rescue fund
By POLITICO STAFF | 9/14/08 10:51 PM EST
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