MSRB Issues Statement on Financial Market Developments

Date: September 16, 2008

Contact:             Jennifer A. Galloway, Chief Communications Officer
                         (703) 797-6600


Alexandria, VA – The Municipal Securities Rulemaking Board is following closely financial market developments and their possible effect on the municipal securities market. The MSRB expects the municipal market to continue to operate in an orderly manner, with other market participants absorbing new issuance activity.

On the secondary market side, while some short-term pressure on prices and interest rates can be expected, the MSRB does not expect longer-term liquidity issues that would impair a robust, secondary municipal market. 

The MSRB does not regulate the derivatives market, but municipal issuers with derivatives contracts may be affected by this week's developments.  Issuers should be aware of the terms of their contracts and may consider ongoing efforts led by the International Swaps and Derivatives Association to work with counterparties.

The MSRB is prepared to provide any necessary assistance to preserve orderly market operations in the municipal market.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.