A planned superfund of $80 to $100 billion to alleviate the subprime lending crisis is gaining ground, though some potential investors remain skeptical. Yesterday, Wachovia Corp. came on board; Fidelity and Federated Investors have already agreed to chip in. The trio of banks leading the fund—Citigroup, JP Morgan Chase, and Bank of America—aim to invest less than half the target number, the Wall Street Journal reports.
Goldman Sachs, Lehman Brothers, Bear Stearns and Morgan Stanley have had exploratory talks but are still on the fence. The big European banks are hanging back, possibly holding out for a great role or higher fees, the Journal speculates. Treasury supports the fund to buy up mortgage securities, but one detractor dubbed it "JP Morgan and Bank of America helping out Citibank."