The Brookings Institution is seeking research papers for its 11th annual Municipal Finance Conference set to be held July 18-19.
The conference is a joint venture of Brookings, Brandeis University, Washington University in St. Louis and the University of Chicago and this year is especially interested in papers on “the impact of COVID on state and local finances and lessons learned, innovations in funding infrastructure (particularly relevant in the wake of the bipartisan infrastructure bill), the threats posed by and responses to climate change, and the evolution of the municipal bond market."
“We feel that there's substantial benefit in getting together people who are in the muni market with people who are in state and local government and academics who study both the muni market and state and local fiscal policy,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy. “The silos in this sector are just so overwhelming that over time, I think we've succeeded in breaking them down and getting some interplay.”
The conference agenda is typically split between emerging topics that are hot in the news such as COVID-19 and climate change and classic muni topics such as regulatory concerns, factors affecting liquidity, and other more typical concerns. While the agenda has yet to be released, it is typically divided in two: one focused on capital markets and one more centered around policy.
“The capital markets track may look at how you price bond options, callable bonds versus non-callable bonds and bank ownership of bonds versus market ownership of bonds,” said Richard Ryffel, professor of finance practice at Washington University in St. Louis. “Anything that has to do with structuring and issuing and trading bonds that would fall into the category of capital markets.”
“The policy category is where the Hutchins Center has been really helpful because they bring connections to other think tanks and foundations,” Ryffel added. “For policy, we would look at things like bankruptcy, bond disclosure, bond ratings, pension funding or lack thereof and other things like that.”
The conference began 12 years ago when Ryffel attended a presentation by Daniel Bergstresser, associate professor of finance at Brandeis University and noticed the wide chasm that existed between academics and practitioners in municipal finance.
“I don't know statistics as well as he does and he didn't know the market,” said Ryffel, who in addition to his part-time teaching duties serves as executive vice president and managing director of wealth management for First Bank.
“What I saw in the practice of municipal finance is that there just wasn't a whole lot of science behind it,” he said. “Issuers didn't understand things like how to value call options and transactions weren't always tax efficient because no one was studying this, unlike in corporate finance and asset pricing of taxable bonds, or stocks, where there's tons of research.”
The two of them then approached Brookings Institution, where the economic studies program was interested in homing in on areas of fiscal policy that don’t receive enough attention and state and local finance seemed to be a great option.
“We’re more convinced of that every day,” Wessel said.
Over the years the judges have seen more and more submissions from muni market participants, of which they expect roughly 100 this year. But the conference itself has continued to be a success in their eyes from the sheer crossing of so many market segments, that wasn’t the case before the conference began.
“It's made the research better,” said Justin Marlowe, research professor for the University of Chicago. “It's made the practice community more aware of what we're learning about how the market works and certainly there's been a great conversation with regulators and others who have an interest in the policy and structure of the market.”
The deadline for submissions is March 4 and a panel of roughly 20 judges, headed by Ryffel, Bergstresser, Wessel and Marlowe, will select those papers that are conference worthy by March 28.
The submission form also requires those submitting to state their preference for either holding the conference in-person or virtually, following a switch to a virtual conference in 2020 and 2021. The panel will then make a decision on how the conference will be held.
