10th annual Municipal Finance Conference

The Municipal Finance Conference aims to bring together academics, practitioners, issuers, and regulators to discuss recent research on municipal capital markets and state and local fiscal issues. The conference is a joint venture of the Hutchins Center on Fiscal and Monetary Policy at Brookings, the Rosenberg Institute of Global Finance at the Brandeis International Business School, the Olin Business School at Washington University in St. Louis, and the Harris School of Public Policy at the University of Chicago.  

The 2021 conference was held virtually across three days, each of which focused on a particular theme: 

• • Monday, July 12: COVID-19’s impact on state & local budgets and the muni bond market
    Video available here, and transcript available here.
  • Tuesday, July 13: Recent developments in the muni bond market
    Video available here, and transcript available here.
  • Wednesday, July 14: Financing state & local infrastructure investments
    Video available here, and transcript available here.

Following the paper presentations on Wednesday, two concurrent breakout sessions were hosted on Zoom.

During the live event, viewers submitted questions at sli.do using the code #MuniFinance or on Twitter using the hashtag #MuniFinance.  

Day 1: Monday, July 12
COVID-19’s Impact on State & Local Budgets and the Muni Bond Market 

Video available here: https://www.youtube.com/watch?v=eKkwkunsaRM

Moderator:
Dan Bergstresser (Brandeis International Business School) 

11:30 am – Opening Remarks
David Wessel (Brookings Hutchins Center)

11:35 am – Flight to Liquidity or Safety? Recent Evidence from the Municipal Bond Market
Authors: 
Huixin Bi (Federal Reserve Bank of Kansas City)
Blake Marsh (Federal Reserve Bank of Kansas City)
Final Paper»  Slides»

Discussant: 
Brad Wendt (Charles River Associates) 

12:10 pm – The Option Value of Municipal Liquidity: Evidence from Federal Lending Cutoffs during COVID-19
Authors: 
Andrew Haughwout (Federal Reserve Bank of New York)
Ben Hyman (Federal Reserve Bank of New York)
Or Shachar (Federal Reserve Bank of New York)
Final Paper»   Slides»

Discussant: 
Melissa Moye (U.S. Treasury)
Slides»

12:45 pm – Break 

12:55 – Mutual Fund Fragility, Dealer Liquidity Provisions, and the Pricing of Municipal Bonds
Authors:
Yi Li (Federal Reserve Board)
Maureen O’Hara (Cornell University)
Xing (Alex) Zhou (Federal Reserve Board)
Final Paper»   Slides»

Discussant:
Mahyar Kargar (University of Illinois at Urbana-Champaign)
Slides»

1:30 pm – Limits of Disclosure Regulation in the Municipal Bond Market
Authors:
Nathan Heinrich (Federal Reserve Board)
Ivan Ivanov (Federal Reserve Board)
Tom Zimmermann (University of Cologne)
Final Paper»   Slides»

Discussant:
Emily Swenson Brock (Government Finance Officers Association)

2:05 pm – Break  

2:15 pm – Panel discussion
Marc Joffe (Reason Foundation)  Final Paper»  Slides»
Kimberly Murnieks (Ohio State Office of Budget and Management)
Brian Sigritz (National Association of State Budget Officers)  Slides»
Moderator:
David Wessel (Brookings Hutchins Center)

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Day 2: Tuesday, July 13
Recent Developments in the Muni Bond Market 

Video available here: https://www.youtube.com/watch?v=IOMrtimtCmU

Session moderator:
Justin Marlowe (University of Chicago)

11:30 am – Opening Remarks
David Wessel (Brookings Hutchins Center)

11:35 am – Calling All Issuers: The Market for Debt Monitoring
Authors: 
Huaizhi Chen (University of Notre Dame)
Lauren Cohen (Harvard Business School and NBER)
Weiling Liu (Northeastern University)
Final Paper»   Slides»

Discussant: 
Dave Abel (Columbia Capital Management)
Slides»

12:10 pm – Par Munis – Sub-Par Performance
Authors: 
Guy Davidson (BondMatch)
Andrew Kalotay (Andrew Kalotay Associates)
Final Paper»   Slides»

Discussant: 
Steve Winterstein (MarketAxess) 

12:45 pm – Break 

12:55 – Pay Now, Play Later: Political Connections and Underwriting Relationships in the Muni Market
Authors:
Steve Liu (Missouri S&T)
Z. Jay Wang (University of Oregon)
Final Paper»   Slides»

Discussant:
Larry Fauver (University of Tennessee, Knoxville)
Slides»

1:30 pm – Direct vs. Indirect Federal Bond Subsidies: New Evidence on Cost of Capital
Authors:
Martin Luby (University of Texas at Austin)
Peter Orr (Intuitive Analytics)
Rich Ryffel (Washington University in St. Louis)
Final Paper»   Slides»

Discussant:
Sarah Snyder (Samuel A. Ramirez & Co.)
Slides»

2:05 pm – Break  

2:15 pm – Panel: The perspective from muni-bond issuers
Dwight Burns (Dallas Area Rapid Transit)
Manju Ganeriwala (Virginia Department of Treasury)
Lakshmi Kommi (City of San Diego)
Uri Monson (School District of Philadelphia)
Moderator:
Justin Marlowe (University of Chicago)

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Day 3: Wednesday, July 14
Financing State & Local Infrastructure Investments  

Video available here: https://www.youtube.com/watch?v=O1gbUvUaGLg

Moderator:
Louise Sheiner (Brookings Hutchins Center)

11:30 am – Opening Remarks
David Wessel (Brookings Hutchins Center)

11:35 am – Teachers or Roads: How Fluctuations in Public Finances Erode Public Infrastructure
Authors:
Troup Howard (University of Utah)
Adair Morse (U.S. Treasury; on leave from University of California-Berkeley)
Final Paper»     Slides»

Discussant:
Tracy Gordon (Urban-Brookings Tax Policy Center) 

12:10 pm – Maintaining Maintenance: The Real Effects of Financial Reporting for Infrastructure
Authors:
Ryan McDonough (Rutgers University) 
Claire Yan (Rutgers University)
Final Paper»   Slides»

Discussant:
Dean Mead (Governmental Accounting Standards Board)
Slides»

12:45 pm – Municipal Bond Insurance and the U.S. Drinking Water Crisis
Authors:
Ashwini Agrawal (London School of Economics & Political Science)
Daniel Kim (BI Norwegian Business School)
Final Paper»   Slides»

Discussant:
Suzanne Finnegan (Build America Mutual)

1:20 pm – Break

1:30 pm – Breakout sessions (on Zoom–log in details provided below)

These two sessions were held concurrently. 

What’s going on in the state and local sector?

Breakout session moderated by Louise Sheiner, Hutchins Center on Fiscal and Monetary Policy

Continue the conversation with an informal group discussion on state and local finances, touching on the following topics:

• What’s been holding back employment by state and local governments, and when is it likely to recover?
• How much of the initial $150 billion in Coronavirus Relief Funding has been spent, and what has it been spent on?
• What are state and local governments going to do with the aid from the American Rescue Plan? How are those decisions being made, and what kind of variation in spending patterns should we expect across states?
• What are states expecting from an Infrastructure package, and how is uncertainty about that affecting decisions.
• How has the pandemic affected state and local pensions?

 

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Ongoing developments in the municipal bond market

Breakout session moderated by Daniel Bergstresser, Brandeis University

This breakout session will continue the conversation with an informal group discussion of topics related to recent developments in municipal debt markets, touching on the following topics:

• Policy, practice, and research related to taxable municipal bonds.
• Advance refundings and more recent advance-refunding alternatives.
• Direct bank lending to municipalities, the shrinking floating-rate market, and other topics.

 

2:15 pm – Event concludes