Takeaways by Bloomberg AI
- US banks hold nearly $295 billion of municipal securities and around $190 billion in direct loans from municipalities, making up about 1.18% of total bank assets.
- Banks remain “highly diffident” buyers of municipals, according to MMA strategists led by Matt Fabian, despite attractive valuations and a low default rate.
- Banks and insurance companies have scaled back municipal-bond purchases, says Shannon Rinehart, co-head of municipal investments at Columbia Threadneedle, and Eric Kazatsky, a client portfolio manager at MacKay Municipal Managers, attributes their absence to uncertainty around federal tax policy.
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Bloomberg Markets
By Aashna Shah
August 20, 2025