Report: Super-SIV Fund Dead

A federal government-spearheaded effort to launch an investment fund coordinated by major banks exposed to bleeding investment vehicles has been dropped, according to a published report.

Bank of America(BAC Quote), Citigroup(C Quote) and JPMorgan Chase(JPM Quote), prodded by Treasury Secretary Henry Paulson, have been working since September to raise money for the fund to invest in troubled, so-called structured investment vehicles, or SIVs. Now, they are ready to abandon the effort, according to the Wall Street Journal.

The Master-Enhanced Liquidity Conduit, or MLEC, as the fund was called, struggled to attract interest as many SIV-laden banks -- including Citi -- instead took troubled assets onto their balance sheets. HSBC(HBC Quote) and Dusseldorf, Germany-based bank WestLB also took the plunge.

A Bank of America spokesman declined to comment. Messages left for Citi and JPMorgan were not immediately returned.

The three banks and BlackRock(BLK Quote), the proposed fund's lead manager, earlier this week had issued a joint statement saying they were still committed to the fund.