DealBreaker Afterhours: Muni Bond Fairness Law Moves Forward

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We interrupt happy hour to report told that the House Financial Services Committee has finalized a bill introduced earlier this month by Barney Frank that would place increased regulatory scrutiny on bond insurers and rating agencies, according to sources in our nation's capital. The so-called "Municipal Bond Fairness Act" as the legislation is named, would require bond insurers to submit information about their financial soundness. It also requires ratings agencies to use one standard to rate both corporate and municipal bonds.
Frank has been one of the critics of the bond rating system, claiming that the ratings have raised borrowing costs for municipalities despite their relative safety compared with corporate debt. You already know what we think of this theory.
The bill will now likely go to the full House for consideration. We, on the other hand, are going to our local watering hole for drinks.