10 banks join to create US$70 bln emergency cash pool
15th Sep 08, 3:57pm
Ten of the world's biggest banks have taken emergency action to create a US$70 billion pool of cash to lend to institutions in financial trouble. The move is the latest attempt by US authorities and big banks to prevent the expected collapse of Lehman Bros from spreading into a global rout on financial markets when trading resumes fully later on Monday. The banks in the "Big 10" include JPMorgan, Goldman Sachs, Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche, Merrill Lynch, Morgan Stanley and UBS. They are putting up US$7 billion each to create the pool. The banks said in a statement late on Monday that any borrower could get a cash injection of up to one third of the total size of the pool and that the pool could get bigger if other banks join. The collective effort to provide an alternative pool of liquidity appears an attempt to supplement the role of the US Treasury and Federal Reserve, which refused this weekend to bail out Lehman Bros.