Private lending to U.S. states and cities has more than doubled over the past decade. But bondholders aren’t being told of the risks.
Between 50% to 80% of such loans aren’t disclosed to bondholders despite regulations enacted in 2019 that required them to be reported in securities filings, according to a study co-authored by a senior economist at the Federal Reserve, which was presented last week at the Brookings Institution’s 10th annual Municipal Finance Conference. The paper compared loans disclosed through the