Commercial Paper Market Being Revived by Citigroup,JPM, and Bank of America

Bank of America, Citigroup, and JP Morgan are expected to announce as early as today the establishing of an $80 Billion Commercial Paper fund. The fund is aimed at helping unlocking the asset-backed paper market from its current condition.

The fund might also help avoid units setup to provide subprime debt from selling off their assets at “fire-sale” prices. The several months subprime lending has become essentially not available with lending for things such as vacant buildings extremely difficult to place.

My guess is the $80 Billion funds initial goal will be to inject confidnece into the marketplace so that prices of commercial paper stabilize and provide reasonable exist for the investment vehicles that originally issued or purchased the debt.

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