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Abstract: 

This issue of the Municipal Finance Journal focuses on monetary policy, health care finance, and state (in)solvency, all powerful topics affecting state and local financing and the municipal securities market. At the 2015 annual conference of the National Federation of Municipal Analysts, a panel discussed Federal Reserve policy and its implications for the municipal bond market. Investor relations director Nick Sourbis moderated the panel, which included monetary expert Roberto Perli, fixed-income research manager Thomas McLoughlin, and portfolio manager Jeffrey Burger. Their comments on both short- and long-term impacts stand as valuable insights into the ongoing importance of Federal Reserve policy for the municipal bond market. The Affordable Care Act has a continuing material impact on hospital finance. Two hospital finance chiefs, Lisa Zuckerman and Chris McLean, are joined by a health-care consultant from a municipal advisor firm, Anu R. Singh, in a panel moderated by buy-side analyst Jim Gilliland. Together, they dissect the incentives embodied in the ACA and the resulting cross-subsidies required by a static income base. State governments in America cannot file for bankruptcy under federal law. A sweeping story of state fiscal imbalances and the possibility of state insolvencies offers a sobering view of debt management by state governments. Tracing the history from Alexander Hamilton through state defaults in the nineteenth and twentieth centuries to the current pressures on state finances, lawyer-economist Joseph V. Kennedy makes a case for state bankruptcy options.

Keywords: Federal policy, municipal bond market, supply and demand, credit spreads, interest rates, Affordable Care Act, Medicaid, healthcare bonds, bond ratings, readmission penalties, State insolvency, federal bailout, state default, fiscal imbalances

Affiliations:  1: Georgia State University.