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Volcker Rule delay good for U.S. municipal bond market -Moody's 

January 27, 2015

Lisa Lambert, Reuters 

The $3.7 trillion U.S. municipal bond market will benefit from a recent delay in implementing part of the Dodd-Frank financial reform law known as the Volcker Rule,Moody's Investors Service said on Monday.

The rule requires banks to unwind the tender option bonds that they, along with closed-end funds, use to finance purchases of municipal bonds. Last month Congress passed legislation giving banks extra time to comply with the rule.

"This delay is credit positive for municipal closed-end funds and the municipal bond market at large," said the rating agency. "The extension will also help prevent a sharp price correction in muni bonds, since trusts can be unwound and underlying assets sold more gradually."

Read More: Reuters 

 
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