Philadelphia may see costs from interest-rate swap contracts climb to as much as $186 million. Yet it’s lobbying to exempt itself from a proposed Pennsylvania ban on the derivatives that would be the first in the U.S.
Between debating the location of a proposed dog park and discussing taxi permit fees one night last month, the city council in Oakland, California, turned to severing ties with Goldman Sachs Group Inc.
Pennsylvania should ban the use of interest-rate swaps by municipalities and raise the bar for issuing debt to avoid the type of fiscal calamity that besets Harrisburg, the city’s former receiver told state lawmakers.
A multistate probe of alleged manipulation of interest rates threatens to leave banks liable for billions of dollars in estimated state and local losses from the scandal, even as they settle with national regulators.
Water and electric customers in the Seattle area, most of whom pay U.S. taxes, will pay an additional $14 million to get out of an agreement with American International Group Inc., the insurance company rescued from insolvency in 2008 by American taxpayers.