- Infowars - http://www.infowars.com -

Big Banks Don’t Want California’s IOUs

Posted By admin On July 7, 2009 @ 1:43 pm In Old Infowars Posts Style,U.S. News | Comments Disabled

RYAN KNUTSON
The Wall Street Journal
July 7, 2009

[efoods]A group of the biggest U.S. banks said they would stop accepting California’s IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.

The development is the latest twist in California’s struggle to deal with the effects of the recession. After state leaders failed to agree on budget solutions last week, California began issuing IOUs — or “individual registered warrants” — to hundreds of thousands of creditors. State Controller John Chiang said that without IOUs, California would run out of cash by July’s end.

But now, if California continues to issue the IOUs, creditors will be forced to hold on to them until they mature on Oct. 2, or find other banks to honor them. When the IOUs mature, holders will be paid back directly by the state at an annual 3.75% interest rate. Some banks might also work with creditors to come up with an interim solution, such as extending them a line of credit, said Beth Mills, a California Bankers Association spokeswoman.

Read entire article


Article printed from Infowars: http://www.infowars.com

URL to article: http://www.infowars.com/big-banks-dont-want-californias-ious/

Copyright © 2013 Infowars. All rights reserved.