Policy Changes and Management
Studies in Fiscal Federalism and State–local Finance series
Why is understanding the financial instruments sold by state and local governments in the United States of America important? The 2007–09 Financial Crisis and Great Recession tested financial institutions and markets like nothing else since the depression of the 1920s and 1930s, changing them in fundamental ways. The municipal securities market and its institutions were no exception. The municipal market was placed under extreme stress and several of its practices and institutions did not stand up to the challenge. The municipal market is a changed market, and our understanding of the market must evolve as well. The scope of this book is the market that state and local (subnational) governments have used to meet their capital needs since the seventeenth century. The municipal market is essential to the well-being of American society and our book provides an analytical treatment of the essentials of the market. Our book contributes to the understanding of the municipal securities market in the post-Financial Crisis era. The focus of the book is on subnational debt issuers and their constituents. The aim of the book is to assist scholars and students, policymakers and practitioners, develop policies and implement practices that help the municipal securities market serve its vital role in society. Throughout the book we stress the importance of understanding how the role and function of the municipal market operates alongside the unique structure of American fiscal federalism.