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Opinion
Mark Gilbert

A Win-Win Moment Dawns for a New Bond Market

The pandemic may finally prompt U.K. local authorities to tap the capital markets for funds.

She might be expecting more help from her local council.

She might be expecting more help from her local council.

Photographer: Geoff Caddick/AFP via Getty Images

It took six years for the U.K. Municipal Bonds Authority to make its capital markets debut, with its first bond sale arriving in March. The pace, though, could be about to accelerate. As the pandemic squeezes local governments already strapped for cash, there’s a renewed impetus to establish a fully-fledged U.K. muni market to provide a quasi-sovereign alternative to government gilts.

Many other countries already have thriving regional debt markets, including Germany, Italy and Spain. In the U.S., the muni market is worth more than $4 trillion. Thus far, efforts to establish a similar borrowing venue in the U.K. have faltered.