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Big Banks Settle on Superfund Terms

Paulson says fund will help, but analysts bearish on its prospects

By Wesley Oliver,  Newser Staff

Posted Nov 11, 2007 12:49 PM CST
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(Newser) – The country’s top three banks have finalized agreements for the $75 billion superfund they hope will cushion further blows to the credit market, reports the NY Times. After nearly two months of haggling, Bank of America, Citigroup, and JPMorgan Chase agreed to simpler conditions than outlined in the fund’s proposals, but some analysts still insist the fund won’t succeed.

Treasury Secretary Hank Paulson admits the fund isn’t “a savior,” but argues, “Anything at the margin that will speed up liquidity is worth trying.” The banks will need any support they can get, as debt market conditions continue withering and investor resistance to pooled assets solidifies. Major credit rating agencies have yet to bless the superfund.

Secretary of the Treasury Henry Paulson testifies before the House Financial Services Committee Thursday, September 20, 2007 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)
Secretary of the Treasury Henry Paulson testifies before the House Financial Services Committee Thursday, September 20, 2007 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)   (Associated Press)
The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. said Friday, July 20, 2007 its second-quarter profit rose 18 percent as strong overseas operations helped the biggest US bank pull in record revenues. (AP Photo/Mark Lennihan, file)
The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. Citigroup Inc. said Friday, July 20, 2007 its second-quarter profit rose 18 percent as strong overseas operations...   (Associated Press)
JP Morgan Chase is one of three top banks involved in the creation of a superfund that aims to stem further instability in the credit market.
JP Morgan Chase is one of three top banks involved in the creation of a superfund that aims to stem further instability in the credit market.   (Getty Images)
U.S. Treasury Secretary Henry M. Paulson, Jr. responds to a question during the National Park Foundation Leadership Summit on Partnership and Philanthropy Monday, Oct. 15, 2007, in Austin, Texas. (AP Photo/Harry Cabluck)
U.S. Treasury Secretary Henry M. Paulson, Jr. responds to a question during the National Park Foundation Leadership Summit on Partnership and Philanthropy Monday, Oct. 15, 2007, in Austin, Texas. (AP...   (Associated Press)
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Citigroup • Bank of America • Henry Paulson • Treasury Department • mortgage backed securities • structured investment vehicles • superfund • auto loans • credit card loans • JPMorgan Chase

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