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Banks Set Up $70 Billion Emergency Loan Pool

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An emergency credit pool set up to ease a possible credit shortage in the wake of the collapse of Lehman Brothers was announced by a consortium of ten banks. The pool will be a $70 billion loan program, with each of the the ten banks involved contributing $7 billion. Here's the Associated Press, which has been leading on this story.

The ten banks, which include JPMorgan Chase & Co. and Goldman Sachs Group Inc., 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 Corp., Barclays PLC, Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, Merrill Lynch & Co., Morgan Stanley and UBS.