This preview shows page 1. Sign up to view the full content.
Unformatted text preview: because of the rising interest rates so they decided to refinance their debt. The banks found this very profitable so they competed to refinance the debt. Because of the refinancing and interest rate swaps the local government ended up in about 5 billion dollars in debt. Because these financial instruments, such as interest rate swaps, are unregulated, there was fraud happening. These financial instruments were unregulated because of a law that was passed in 2000 called the Commodity Futures Modernization Act. This happened in Greece, Italy, and other European countries as well as in many other cities throughout the United States. Right now there is a financial reform bill that does not do much to regulate these unregulated instruments but they have a chance that it might. http://www.democracynow.org/2010/4/12/looting_main_street_matt_taibbi_on...
View Full Document
- Spring '10