In a move that looks to help out the troubled global credit market, 3 major investment banks are teaming up to create a “Superfund“, of sorts, to inject confidence into the credit market and ease investors fears of investing in commercial paper.  The fund would buy distressed debt.

“This is exactly what they should be doing — accepting responsibility instead of asking the government to bail them out.” ….called the Master Liquidity Enhancement Conduit or M-LEC — would launch in the next 90 days and be used to buy distressed securities from SIVs. That would in turn give them the capital to pay off their commercial paper obligations, and ultimately extricate themselves from what otherwise might have been substantial losses.

By buying SIVs’ distressed investments, the new fund would inject enough liquidity into the market to make investors more confident in buying commercial paper. The funds’ backers said they will shy away from risky instruments and buy only highly rated asset-backed debt…