The US sub-prime mortgage sector has seen record defaults
Some of America's largest banks are expected to announce plans later to form a $75bn (£37bn) joint fund to invest in US sub-prime mortgage debt.
The banks, including Citigroup and JP Morgan, are seeking to boost confidence in the sector and prevent a further dip in the price of such investments.
The banks are said to fear more cuts in the price of sub-prime mortgage debt, which is hitting their balance sheets.
Higher mortgage rates have sparked record sub-prime home loan defaults.
This has caused a wider credit squeeze as banks and other investors have been less willing to lend to each other.
Analysts say the big US banks hope their move will deter the current holders of sub-prime mortgage securities from dumping them on the market at knock-down prices.
Such a "fire sale" could intensify the credit crisis.
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