WASHINGTON — In response to a spate of municipal bankruptcies and ongoing fiscal challenges at the local level, the California treasurer’s office has embarked on a project aimed at predicting cities’ likelihood of defaulting on bonds.

The office of Treasurer Bill Lockyer has hired San Francisco-based research organization Public Sector Credit Solutions and San Jose State University economist Matthew Holian to head the effort, which aims to create a “default probability model for city bonds,” according to a media release.

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