HARRISBURG, Pa. – In Pennsylvania’s capital, itself a poster child for municipal financing gone haywire, state lawmakers have rekindled an effort to ban cities, towns and school districts from engaging in interest-rate swap transactions.

Four bills before Pennsylvania’s legislature would prohibit local issuers and agencies from participating in swaps. Swaps are derivative transactions between a bond issuer and an investment bank exchanging interest obligations, commonly a contractual trade of variable interest rates for fixed rates.

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