LawmakerSeeks Actionon Muni Market

Federal regulators should act quickly resolve "structural weaknesses" in the municipal securities market, said Rep. Spencer Bachus, R-Ala., the ranking member of the House Financial Services Committee, in a statement released ahead of today's closely-watched congressional hearings on bond insurers. Bachus suggested that the ongoing problems facing the financial guarantors show that the existing regulatory regime for munis is broken.e_SFlb"While the involvement of bond insurers in the subprime mortgage and commercial bond markets is the trigger for the very serious problems now being experienced, the structural weaknesses in the municipal debt markets go far beyond these immediate difficulties," he said. "This is not an isolated problem, and band-aid solutions today will not prevent similar, maybe even worse problems down the road." Bachus also referenced the Securities and Exchange Commission's investigation into possible securities fraud tied to the sale of swaps and bonds in Jefferson County, Ala., which is located in his district. "The inadequacy of the current regulatory system is being clearly illustrated in the situation unfolding in Jefferson County," he said. -Andrew Ackerman

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