NEW YORK -- A group of global banks and securities firms announced late Sunday a $70 billion loan program that financial companies can tap to help ease a credit shortage that threatens global financial markets.
The ten banks, which include JPMorgan Chase and Goldman Sachs, said they were committing $7 billion each for the pool. The pool would act as a signal to the marketplace that banks, brokerages, and other financial companies can lean on the fund to take care of borrowing needs.
The banks said the program will be available to participating banks which can get a cash infusion up to a maximum of one-third of the total size of the pool. The size of the loan program might increase as "other banks are permitted to join."
All participating banks intend to use this facility beginning this week, the statement said.
The banks also include Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, Morgan Stanley and UBS.
The banks made the announcement to try to head off market disruptions after the possible failure of investment bank Lehman Bros. Lehman was expected to file for bankruptcy by Monday after succumbing to dwindling investor confidence due to losses from its real estate holdings.