The three banks charged by Treasury with setting up a fund to bail out investments threatened by the subprime mess are abandoning the project, the Wall Street Journal reports. Citigroup, Bank of America and JP Morgan Chase had been working since September on the plan to rescue structured investment vehicles, but they have struggled to raise money for the project.
As recently as Tuesday, the banks were talking about the fund’s upcoming launch. Now they are expected to announce its official demise on Monday, although they could resurrect it if conditions worsen. Banks, especially Citigroup, have taken steps since the plan's inception to lessen its need, the Journal notes.