– Police accountability failures are reshaping municipal bond markets, driving credit downgrades and rising insurance liabilities as cities like Phoenix and Minneapolis face fiscal strain from reform costs.
– Racial disparities in credit ratings highlight systemic biases, with cities having larger Black populations often rated lower despite comparable economic performance, merging social justice with financial risk.
– Third-party litigation financing inflates settlement costs by 27%, pressuring insurers and municipalities as prolonged legal battles increase borrowing costs and regulatory scrutiny intensifies.
– Investors must balance high-yield litigation finance opportunities with governance risks, prioritizing cities with transparent reforms and diversified revenue to mitigate systemic instability.
ainvest.com
by Henry Rivers
Saturday, Aug 16, 2025 4:30 am ET