Limits of Disclosure Regulation in the Municipal Bond Market

Ivan T. Ivanov (), Tom Zimmermann and Nathan Heinrich ()
Additional contact information
Ivan T. Ivanov: Federal Reserve Board
Nathan Heinrich: Federal Reserve Board

No 186, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We examine recent regulation requiring US municipal governments to disclose private debt. We show that governments fail to disclose 55-80% of reportable debt events and that, conditional on disclosure, filings often omit contract details essential for bond pricing. Non-compliant issuers are also riskier than compliers, with disclosure decreasing in the potential of private debt to adversely affect bondholders. Event studies suggest that disclosure reveals positive news and is especially informative to investors in low-rated bonds or during market turmoil episodes. Overall, private debt disclosure remains largely voluntary, highlighting challenges to recent federal initiatives to increase transparency for municipal bond investors.

Keywords: Bond pricing; disclosure regulation; private debt (search for similar items in EconPapers)
Pages: 64 pages
Date: 2022-08
New Economics Papers: this item is included in nep-fmk and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_186_2022.pdf First version, 2022 (application/pdf)

Related works:
Working Paper: Limits of disclosure regulation in the municipal bond market (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:186

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