Royal Bank of Canada

L.A. weighs plan to press banks to renegotiate rate swaps

Los Angeles could become the nation's biggest city seeking to jettison financial deals crafted on the eve of the Great Recession that union and community activists contend are draining funds from city services.

The City Council will vote Wednesday on a proposal to pressure two banks to redo borrowing agreements entered into before the 2007-09 financial crash. Supporters of the proposal argue banks benefited unfairly when interest rates fell to historic lows during the recession.

The local push to renegotiate the so-called interest rate swaps is part of a national campaign that public employee labor groups and other advocates say seeks to correct a lingering and harmful...

EDITION: California | U.S. & World