Senators Propose Bill to Include Municipal Debt as Liquid Assets
- Bill would classify munis as “Level 2B" assets for bank rules
- Senators Warner, Schumer and Rounds to propose legislation
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A group of U.S. senators introduced a bipartisan bill that includes municipal bonds among assets that banks need to hold to weather a financial shock.
Democratic Senators Mark Warner and Chuck Schumer and Republican Mike Rounds introduced a scaled-down version of legislation that passed the House in February that would classify investment grade municipal bonds on par with U.S. agency securities issued by Fannie Mae and Freddie Mac to meet bank liquidity rules. The Senate measure classifies munis as “Level 2B” assets comparable to certain corporate bonds and stocks.