Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement they 'initiated a series of actions to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets.'

They agreed to create a 'collateralised borrowing facility' of US$70 billion, with each bank contributing US$7 billion dollars, to help ease access to credit.

They also said they would work together 'to help facilitate an orderly resolution' of the derivatives exposures between Lehman Brothers and its counterparties.

'These actions reflect the extraordinary market environment,' the statement said.

'The banks are committed to continuing to work closely with one another as well as the US Treasury Department, the Federal Reserve, the Securities and Exchange Commission, governments and regulators around the world, and other market participants, to ensure the industry is doing everything it can to provide additional liquidity and assurance to our capital markets and banking system.'

The 10 banks would be able to tap this facility, with any bank eligible for up to one-third of the fund. The amount may be expanded if more banks join the programme.

The announcement came moments after the Federal Reserve announced new steps to ease access to emergency credit for struggling financial companies, by broadening the collateral to be used for central bank loans.

The unusual Sunday moves came as financial markets braced for a possible collapse of Lehman Brothers, a Wall Street giant whose failure could have wide-ranging implications for the financial system.

While there was no official news on Lehman's fate, analysts expected a bankruptcy filing that could affect a range of companies dealing with the Wall Street giant, with a potential to worsen the global credit crunch. -- AFP