Citigroup, Bank of America and JPMorgan are today expected to announce plans for a fund to buy mortgage-linked securities, in an attempt to allay fears of a downwards price-spiral that would hit the balance sheets of big banks.

A person familiar with the discussions said US banks collectively were expected to put up credit guarantees worth about $75bn (£37bn) for the fund, named the Single-Master Liquidity Enhancement Conduit.