SIV rescue plan redundant

Even as the US Treasury Department’s plan to create a rescue fund for troubled investment vehicles comes to fruition, many in the industry say that it is already irrelevant. The entity had originally planned to raise $US80 billion which could be used to prevent sudden sell-offs in securities owned by structured investment vehicles (SIVs) but may be scaled back to $US60 billion. The SIV industry once had $US400 billion in assets, but this has shrunk to $US100 billion (excluding $US66 billion held by Citigroup affiliates) as many troubled SIVs wind themselves down. While Citigroup was the first to propose the initiative it has said that it is working on a separate plan, while HSBC and some other European banks are working independently to solve their problems.