Friday, January 23, 2015

Philadelphia councilman seeks to ban deposits with BofA

Bank of America is getting some negative vibes in the city of brotherly love.

A member of Philadelphia's city council is seeking to ban the city from depositing its funds with Charlotte-based Bank of America and New York-based Citigroup, The Philadelphia Inquirer reports.

According to the Inquirer, the move comes after the city in 2013 filed suit in federal court against nine major banks, including Bank of America and Citigroup, in connection with their manipulation of the London Interbank Offered Rate, or Libor, which artificially suppressed the city's returns on interest-rate swap agreements.

On Thursday, Councilman James Kenney introduced a bill that would not permit the city to give its deposits to the two banks. Here's an excerpt from the story:

According to Kenney's bill, municipal entities such as Philadelphia "were paid lower amounts during the life of their swaps, and they were subjected to huge — and sometimes devastating — financial penalties when they terminated the investments, which were artificially inflated by defendants' misconduct." 
Citigroup and Bank of America "are the two worst actors in the whole game," Kenney said. "To park citizen money in those banks while we're in a bad-swaps deal seems stupid."
The bill does not affect other types of business with the banks, the story says.

I reached out to Bank of America and Citigroup for comment. A Citigroup spokesman said the company had no comment. Here's what a Bank of America spokeswoman said in an email:
Given we have not received any correspondence from the City of Philadelphia relating to this bill, we'd prefer not to comment.


Garth Vader said...

So BOA isn't denying that they manipulated LIBOR.

George Cox said...

Filthadelphia should be banned from being in the U.S.