Interest-rate swaps
Philadelphia, like many cities, has faced serious financial difficulties in recent years. These difficulties have forced the city government to make ends meet by cutting agency budgets, cutting services and raising taxes. The city trimmed almost $100 million off its budget during 2008 and 2009, and the school district faced a $629 million budget hole just this year, which was closed by laying off teachers and cutting programs for students.
The
Pennsylvania Budget and Policy Center, points to highly-speculative, risky interest-rate swap deals the city negotiated with banks such as Wells Fargo, Morgan Stanley and Goldman Sachs that have cost the city and school district $331 million in net interest payments and cancellation fees, according to the
