The Master Liquidity Enhancement Conduit (MLEC), also known as the Super SIV (structured investment vehicle), was a plan announced by three major banks based in the United States on October 15, 2007, to help alleviate the subprime mortgage financial crisis.
[2] The Master Liquidity Enhancement Conduit (MLEC), also known as the Super SIV (structured investment vehicle), was a plan announced by three major banks based in the United States on October 15, 2007, to help alleviate the subprime mortgage financial crisis.
The resulting flood of bargain-priced asset-backed securities could havefurther destabilized the credit markets and perhaps forced the parent institutions to place the SIVs on their balance sheets, indirectly reducing the amount of money the banks could loan.
The Master Liquidity Enhancement Conduit was intended to facilitate the short-term refinancing that these SIVs required, thus avoiding the risk of a self-reinforcing downward spiral in the ABS markets.
[5] Others questioned the legality of fund participants' ability to work in concert, supporting price discovery in certain illiquid positions held by the SIVs, in light of U.S. antitrust law.