The Federal Reserve just eliminated municipal bonds from its list of high-quality liquid collateral assets. Banks are liable to start dumping them in favor of Treasuries and corporate bonds. The cost of credit will increase for municipal governments and decrease for corporate and financial institutions, and power and financial resources will be further shifted from the public sector to the private sector.
Following a possible 10-day freeze on revenue collected on Palestinian goods that pass through Israel’s ports and airports, a Palestinian investment firm has issued the territory’s first-ever corporate bonds, which Palestinian leaders and businesses hope will strengthen the local economy. Above, Palestinian Prime Minister Salam Fayyad.