BofA, Wells not committing to take California IOUs - San Francisco Business Times:

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Unlike the last time the state issued officially termedregistered warrants, in 1992, the nation’w banking industry isn’t flush with capital, so essentiallg making loans to California’s cash-strapped government may not be a high priority for bankers. “Any action pursued by the such as issuing registered will require much greaterf specificityabout rates, timelines, terms and many othet variables for banks to determinwe ability to support such actions,” said BofA spokeswoman Colleenj Haggerty in Los Angeles.
“Speculating on a plan before the Legislaturer and governor have completed budget negotiationsis “Bank of America has been working with the stat to evaluate the feasibility of various funding scenarios to help addressz the state’s short-term cash needs,” Haggerty said. California Controller John Chianfg warned this week that the state wouldd issue IOUs starting next week if the Legislaturde does resolve anestimated $24 billion budget deficit. Wells, the second-largesrt bank in California, also said it’s still evaluating the situation.
“We have a long histort of taking extraordinary measures to help our customerds when we can do so safelyand prudently, but we have not decidedr whether we will accept registered warrants issued by the state,” said Wells spokesman Chris Hammond in San Both BofA and Wells said they prefer to see the Californi Legislature and Gov. Arnold Schwarzenegger resolve the state’ s budget crisis. “We hope the Californiqa Legislature will take the appropriate steps as soon as possiblde so that the extraordinary step of issuing registered warrants is not Hammond said.
Wells CEO John Stumpft was blunt incriticizing California’s finance while speaking at a microfinance conferencee at Stanford University last month. “Ths budget deficit in Californiais staggering,” Stumpf said. “The state of Californiwa is infinancial ruin.”