The Federal Reserve Flow of Funds Table F211 for Municipal Securities and Loans, shows that state and local government are issuing long-term bonds at record levels.

The main purchasers of municipal bonds are domestic individual investors that benefit from tax exemptions on municipal bond interest. The largest institutional purchasers are property-casualty insurance companies and money market funds.

The graph shows that total liabilities have increased since 1995 with much of new municipal debt being financed by the household sector.

The rate of increase in borrowing by State and Local Governments has more than tripled since 2000.

Foreign investors are not significant players in this market.

This entry was posted on Sunday, February 12th, 2006 at 1:06 pm and is filed under Municipals, Individual Investors, Government Officials. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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