The New York Metropolitan Transportation Authority Fell into the Eastern Swap Sinkhole

A. Rashad Abdel-khalik

Chapter 28 in Brazen:Big Banks, Swap Mania and the Fallout, 2019, pp 331-338 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In an article in the New York Daily News on April 28, 2015, Ginger Adam Otis noted that the New York Metropolitan Transportation Authority (NY MTA) was losing money fast: “As fast as the cash comes in, it gets paid out.” She referred to the huge payroll amounts and the money required for capital improvement but she did not mention the hundreds of millions of dollars handed out to big banks annually in connection with interest-rate swaps, essentially for nothing…

Keywords: Swaps; Interest Rate Swap; Unconscionable Contracting; Termination Penalties; Embedded Costs; Paying for Nothing; Gambling; ISDA; Master Agreement; Deceit; Inadequate Disclosure; Hidden Costs; Zero Sum Game; Wealth Transfer; Paper Chasing Paper; Floating Rate; Synthetic Rate; Credit Risk; Demonstrations; Water Shut Off; Union Class Action Suit; The LIBOR Scandal; Non-Profit (search for similar items in EconPapers)
JEL-codes: E43 E44 (search for similar items in EconPapers)
Date: 2019
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