Muni Fairness Act sets a dangerous precedent for ratings
The US Congress took a dangerous step last week when a bill aimed at shoring up the municipal bond market was approved in its committee stage. While the thrust of the legislation will be broadly welcomed, it could herald a new era of political interference in credit ratings — a very dangerous step.
The Municipal Bond Fairness Act, approved last week by the US House Financial Services Committee, has an unobjectionable-sounding title, as such bills always do, and perhaps even unobjectionable-sounding content. But if the bill, HR 6308, is passed by both chambers, its effects would be felt much further afield.
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