THE CHALLENGE OF TRANSPARENCY IN A THINLY TRADED MARKET

The municipal market’s structure – thousands of issuers selling serial maturities to buy-and-hold investors – has meant low trading volumes in most names … and steady work for pricing consultants.  But even that sector of the market has been buffeted by the global financial crisis, and investors’ and regulators’ demands for more visibility into the data and processes that lead to price evaluations.  Will the drive for transparency change how the evaluators work, and what implications will that have for investors and market behavior more broadly?