About a month ago, amid the turmoil that caused about $80 billion in securities to evaporate from the structured investment vehicle (SIV) market, Moody's Investor's Service suggested that bank sponsorship might make the difference between normal operations and the wind down of much of that market.

Based on recent news about the launch of the Master Liquidity Enhancement Conduit (M-LEC), the U.S. Treasury Secretary Henry Paulson was already hard at work on such a plan. While much of the asset-backed commercial paper (ABCP) and SIV markets welcomes the idea of fresh liquidity from a syndicate led by Citigroup, Bank of America and JPMorgan Chase, market sources raise several questions as to how it will all work and whether it will effectively steady the SIV market.

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