A group of ten global commercial and investment banks announced a $70 billion loan program that financial services companies can tap into in order to "enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets."
The banks included in the facility are: Charlotte, N.C.-based Bank of America Corp.; Barclays PLC of London; Citigroup Inc. of New York; Credit Suisse Group of Zurich, Switzerland; Deutsche Bank AG of Frankfurt, Germany; Goldman Sachs Group Inc. of New York; JPMorgan Chase & Co. of New York; Merrill Lynch & Co. Inc. of New York; Morgan Stanley of New York; and UBS AG of Zurich, Switzerland.
Under the terms of the facility, the ten banks are committing $7 billion each to a pool that would be available to participating institutions.
The members of the consortium said the program will be available to participating banks, which can receive a cash infusion up to a maximum of one-third of the total size of the pool.
The banks anticipated that the size of the facility may increase as “other banks are permitted to join the facility,” according to a statement.
The announcement was made to avoid market disruptions amid anticipation that Lehman Brothers Holdings Inc. will file for bankruptcy by Monday, after its shares plummeted last week.
The banks said that the actions reflect the “extraordinary market environment” and were made to ensure that “the industry is doing everything it can to provide additional liquidity and assurance to our capital markets and banking system.”
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