Politics

Swap 'Till You Drop

By Mary Bottari

As the fight on Capitol Hill for financial reform enters its final stages, it is worth asking what will be done to protect states and localities from the Wall Street con. On Thursday, the House-Senate conference committee on financial reform will take up the controversial section of the bill dealing with derivatives reform. Not a local issue right? Wrong. Service Employees International Union's (SEIU) Big Banks campaign has uncovered about 71 states and localities which have bought into dangerous derivatives and swaps deals to finance local priorities.

This information was not easy to uncover, and the total number of munis holding these little ticking time bombs is not known. For the big banks, these deals are off book and off record, and politicians of course don't like to brag about getting swindled. It is only when these deal explode and there is a huge shortfall that the public begins to be aware. Sometimes even that is not enough, and some districts are in denial about the problems posed by their investment portfolio.

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Full post as published by PR Watch on June 23, 2010 (boomark / email).