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BlackListedNews · 08-17-2013, 02:52 AM

The derivatives, known as interest-rate swaps, were supposed to protect Detroit from rising interest payments on a chunk of its variable rate debt. The banks would pay Detroit if interest rates rose, and Detroit would pay the banks if rates fell. By 2009, both interest rates and the city’s credit rating were falling, forcing Detroit to pay the banks some $50 million a year and to pledge roughly $11 million a month in casino-tax revenue as additional collateral.

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08-17-2013, 02:52 AM	#1
BlackListedNews Senior Member Join Date: Aug 2013 Posts: 12,733 Rep Power: 58	No Banker Left Behind The derivatives, known as interest-rate swaps, were supposed to protect Detroit from rising interest payments on a chunk of its variable rate debt. The banks would pay Detroit if interest rates rose, and Detroit would pay the banks if rates fell. By 2009, both interest rates and the city’s credit rating were falling, forcing Detroit to pay the banks some $50 million a year and to pledge roughly $11 million a month in casino-tax revenue as additional collateral. [url]http://feedproxy.google.com/~r/blacklistednews/hKxa/~3/De94nPWSj5I/M.html[url]