California Dreaming

The banks have had about enough of the budget deadlock in Sacramento

"The banking industry's willingness to accept the warrants has acted as a shock absorber in keeping the pressure off the legislature to solve the budget problem," concluded California Banking Association official Greg Wilhelm. With that, after swallowing a total of 876,000 California IOUS worth nearly $2 billion, the Bank of America and other leading California banks last week stopped honoring the so-called registered warrants, which the state has been paying out in lieu of real money.

Nevertheless, slow-motion negotiations back in Sacramento between Republican Governor Pete Wilson and the Democratic-controlled legislature, now oozing into a second month, showed growing signs of...

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