Monday, March 29, 2010


BLOOMBERG--California’s treasurer asked six investment banks that underwrite the state’s bonds to explain why they also market credit-default swaps on them, saying such contracts may cost taxpayers by exaggerating credit risk.

Treasurer Bill Lockyer asked JPMorgan Chase & Co., Bank of America Merrill Lynch, Barclays Plc, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley to detail the extent to which they market the insurance contracts and to explain how trading in them affects the interest cost on the state’s general-obligation bonds, according to letters he released today.

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