Muni Think

Congress is now hard at work on what some believe will be a fundamental restructuring of the framework for financial market regulation. New Securities and Exchange Commission chairman Mary Schapiro, former SEC chairs Arthur Levitt and Richard Breeden, the leaders of the Municipal Securities Rulemaking Board , FINRA, leading experts in securities law, and various interest groups have all testified recently as to changes they believe are needed, including in some instances greater regulation of the municipal bond market.

The commentary article [published April 6] by Michael Decker, co-chief executive officer of the Regional Bond Dealers Association, was blatantly opportunistic, misleading, and self-serving.

To the Editor:

The Jan. 7 article by Michelle Kaske alleges that "questions continue" over the billing and financial practices at the University of Medicine and Dentistry of New Jersey. She refers to an October article in which the Newark Star-Ledger reported that UMDNJ "continued to overbill even during a two-year period when there was a federal monitor observing the school."

While the proposal from the Government Finance Officers Association to raise the small-issue bank-qualified limit to $30 million will be helpful in increasing the demand for smaller municipal credits, there are two major holes.

With recent financial guarantor downgrades generating headlines and destabilizing the municipal bond market, now is a propitious moment to remind fixed-income investors about the power of two-name credit support, and in particular, the improbability of joint default.

To stimulate investment in infrastructure and to boost domestic employment, Congress should permit pension fund purchasers of municipal bonds to reassign only the tax-benefit - the exemption feature - of those bonds to U.S. taxpayers seeking tax deductions.

A proposal has been made to use a portion of the monies available in the recently announced federal bailout to assist the financial guaranty industry incorporating the "good bank, bad bank" model.

There's no denying the importance of infrastructure. But the traditional infrastructure model has become problematic. The growing need to repair or replace aging infrastructure in transportation, utilities, telecommunications, and other sectors has soared to record levels in recent years. At the same time, the cost of building materials is skyrocketing, and local, state, and federal governments are faced with declining tax revenues and higher borrowing costs.

Asked five years ago what we did for a living, we got blank stares when we responded "carbon trading" and "carbon investing." Now, with everyone from PepsiCo to Google to Pearl Jam striving to offset their carbon footprints, placing a value on carbon reduction has become commonplace.