Friday, June 8, 2012

Interest-rate swap rip-off explained. How banks steal from public transit.


Press Clips | ReFund Transit: "Washington, DC – Wall Street banks are gouging public transit riders for more than half a billion dollars each year through toxic interest rate swap deals with transit agencies and the governments that fund them amidst the worst post-war wave of fare hikes and service cuts.  This is the startling conclusion made in Riding the Gravy Train, a report released today by the ReFund Transit Coalition, a group of transit advocates, workers, and supporters.
The report documents how the nation’s biggest banks—flooded with nearly free money from the Federal Reserve—are profiteering on the backs of transit riders from a rate-spread windfall on interest rate swaps with transit agencies and states made before the Great Recession. The swaps are now draining transit agencies of funds desperately needed to keep mass transit rolling in the United States. The full report, which examines these toxic interest rate swaps in 12 major cities, can be found at www.refundtransit.org."

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1 comment:

David Darten said...

Interest rate swaps often exchange a fixed payment for a floating payment that is linked to an interest rate (most often the LIBOR).