Oakland City Council Seeks to Cut Goldman Sachs Ties After Bank Profits from Lowered Interest RatesQuicklink submitted by Mari Eliza Permalink
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|The Oakland City Council has voted unanimously to end a contract with Goldman Sachs that locked it into a financial deal called an high interest rate swap. The city signed on with the bank in 1998 on the premise it would reduce costs of its bonds amid rising interest rates. But after the 2008 financial meltdown, the Federal Reserve cut interest rates to near zero. As a result, Goldman's rate dropped to 0.15 percent -- even as it continued to require Oakland to pay a rate of almost 6 percent. The city council is calling on the city to refuse to do business with Goldman Sachs unless it ends the deal without requiring a $15 million payout. The vote comes after a long campaign by city workers, unions, the Occupy movement and local clergy members.|
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