California city weighs bankruptcy

California city weighs bankruptcy

FRESNO, Calif.

Stockton, the California city with the nation’s second-highest foreclosure rate, is facing a moment of decision on whether to become the biggest city to file for bankruptcy, as a deadline for talks between the city and its creditors approached late today.

City officials still are hoping to reach a deal that would restructure millions of dollars of debt under a new state mediation law designed to help municipalities avoid bankruptcy, City Manager Bob Deis said.

On some nights, negotiations with the 18 creditors have stretched past midnight and remain confidential. But Deis said that to avoid bankruptcy, any deal would have to result in sufficient savings to make the city solvent.

Bank group: Crisis still needs fixes

FRANKFURT, Germany

An organization representing the world’s central banks says risky behavior by big banks once again poses a hazard to the global economy.

The Bank for International Settlements said in its annual report Sunday that banks considered too big to fail still have an interest in risky trading because they can expect taxpayers to cover big losses.

The report says that fact is “moving the financial sector toward the same high-risk profile it had before the crisis” that started in 2007.

Associated Press