NEW YORK–Santa won’t be coming for some distressed banks hit hard by problems in the mortgage market, or at least not as originally envisioned.
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Banks that had been working to bail out troubled investment vehicles hit by the subprime mortgage crisis have nixed a plan to create a special fund to buy assets from structured investment vehicles after struggling to raise money for the fund, a source close to the situation said. Citigroup Inc., Bank of America Corp., and JPMorgan had been working to create such a fund, following a plan first put forth by the Treasury Department.
A lack of interest in the plan by the banks, however, has led to its demise. The banks indicated that under the right conditions it could be resurrected.
