Trading and bartering California IOUs may come soon

By Jan Paschal, Reuters

SAN FRANCISCO (Reuters) - Interest among municipal bond investors in California's IOUs is increasing and trading the promissory notes is poised to start, a spokesman for an online marketplace creating a platform for them said on Monday.

Some are also seeking to barter with IOU recipients.

Earlier this month, California's state government began issuing the IOUs to taxpayers owed tax refunds and to vendors in lieu of payment to avoid a cash crisis, while Gov. Arnold Schwarzenegger and lawmakers haggle over filling a $26.3 billion budget gap to balance the state's books.

Three major banks stopped accepting the IOUs on Friday.

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