[StBernard] Frank Statement on Moody's Negative Outlook on Municipalities

[Westley Annis]

April 8, 2009                                                    

 

Frank Statement on Moody's Negative Outlook on Municipalities

 

            Washington, DC - House Financial Services Committee Chairman
Barney Frank (D-MA) today issued the following statement in response to the
negative outlook assigned by Moody's Investors Service to the
creditworthiness of America's local governments:

 

"I am troubled by the action of Moody's Investors Service to issue a
negative outlook across the board on America's municipalities, which could
raise the interest rates on cities and towns making it more expensive to
borrow funds for infrastructure improvements. Today's action could result in
an unjustifiable burden on local governments, and this may have the
unintended consequence of undercutting the simulative effect of the economic
recovery package. Interest rates on full faith and credit general obligation
bonds are already too high and there is not demonstrated record of default.
The House Financial Services Committee will be holding a hearing in early
May to explore the unfair treatment of full faith and credit general
obligation bonds." 

 

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