Three Bank of America reached an agreement to establish reserve fund.

<P>: Http://finance. Hearing, three of Wall Street giant has reached an agreement to create a huge fund, the fund will be mainly used to support structured investment vehicles. .</ P> <P> to stabilize the credit markets, Bank of America, Citigroup, JP Morgan Chase before the three major Wall Street giant to create a scale of at least 750 billion reserve fund agreement. .The fund will mainly be used to support structured investment vehicles, asset prices fell sharply to prevent such to form a vicious cycle of the market. .</ P> <P> Big Three hand built Fund </ P> <P> According to foreign reports, the three banks after about two months after the 9 agreement negotiations. .Under the agreement, they create a reserve fund the proposed structure is simpler than the original lot. .The fund will begin operating by the end of this year. .The next 5 to 10 days, the three banks will be invited to about 60 financial institutions to the funds. .U.S. Treasury Department as a neutral "third party", called the meeting to discuss the composition of the reserve fund. .</ P> <P> It is understood that the reserve fund will be used to support the structured investment vehicles (SIVs). .SIVs mainly by banks, hedge funds set up, through the issuance of commercial paper to purchase mortgage revenue bonds and other long-term assets. .</ P> <P> subprime crisis, due to difficulties in commercial paper issuance, SIVs are forced to because of financing problems arise fire sale of assets held in bonds. .This has led to sharp fall in asset prices SIVs, some institutions of insolvency, but also easy to form a vicious cycle of the market, giving rise to greater risk. .</ P> <P> Wall Street aftershocks outstanding </ P> <P> U.S. Congress Joint Economic Committee released a report recently estimated that the U.S. housing market decline will continue for one year. .Report is expected from 2007 to the end of 2009, the United States due to inability to repay the subprime mortgage and foreclosure cases will reach 130 million, directly related to the value of the property more than 71 billion U.S. dollars. .Analysts said the credit in particular, the recovery of the housing credit market, may be accompanied by improvement in the housing market could truly realized. .But the current status of the real estate industry showed improvement in the process will slow. .</ P> <P> as housing prices fall, U.S. home buyers homes for sale or difficult to obtain financing through a mortgage. .Affected by the subprime mortgage market, many borrowers can not repay loans, the subprime mortgage market crisis was getting worse. .</ P> <P> many large international financial institutions and therefore subject to drag, HSBC Holdings last week confirmed it has closed its U.S. subprime mortgage-backed securities (MBS) trading sector. .Analysts believe that HSBC is attempting to show its determination to further withdrawal subprime market, but it also means that HSBC may need to make large provisions for the subordinated debt assets. .Earlier, HSBC said, has made adequate provision for U.S. subprime assets, but the market still expects a provision is far less than actually needed. .</ P> <P> addition to HSBC, the world's major financial institutions in the subprime crisis have also been affected to varying degrees. .Up to now, four major Wall Street investment bank Goldman Sachs, Bear Stearns, Morgan Stanley and Lehman Brothers crisis due to subprime writedowns totaled 3.6 billion. .Citigroup suffered greater losses in the third quarter, announced 6.5 billion subprime-related writedowns and losses, the group has also announced that Jiangzai to 8 billion to 11 billion U.S. dollars in writedowns. .</ P> <P> JP Morgan has also said that the U.S. financial sector is expected to subprime investment losses incurred due to impairment of assets may be up to 2,000 billion U.S. dollars, at least 60 billion U.S. dollars in losses by financial institutions has not been disclosed. .JP Morgan warned that the future I'm afraid there will be more negative news, not only the loss of financial companies, banks, brokers, mortgage lenders and insurers will have a direct impact of a storm. .</ P>.