Banks set up $70bn borrowing pool

A group of 10 international banks has established a $70bn (£39bn) borrowing facility to provide liquidity in the face of unprecedented volatility in the money markets.

The institutions involved are Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS.

The group aims to maximise liquidity by creating a borrowing facility in which any of the 10 banks will be able to use up to one-third of the funding pool created if required. It is anticipated that the size of the pool will increase as other banks join.

A joint release from the banks says: “We are committed to continuing to work closely with one another as well as the US Treasury, governments and regulators around the world to ensure the industry is doing everything it can to provide additional liquidity and ass- urance to our capital markets and banking system.”