IDEAS home Printed from https://ideas.repec.org/h/elg/eechap/19966_11.html
   My bibliography  Save this book chapter

Lessons learned from the birth, growth, and collapse of the municipal auction rate securities (MARS) market

In: State and Local Financial Instruments

Author

Listed:
  • .

Abstract

Over the last couple decades, state and local governments increased their reliance on financial management innovations to maximize the financial resources available to public managers. One such innovation, municipal auction rate securities (MARS), was increasingly used by governments up until the 2007/2008 global financial crisis for the purpose of improving the efficiency of their capital financings. However, the crisis in the sub-prime mortgage severely impacted the MARS market to the detriment of many state and local governments. This chapter examines the evolution and collapse of the MARS market as a means of highlighting what we have learned from the financial crisis as it relates to public financial management innovation. Based on this examination, the chapter concludes with some specific "lessons learned" for public financial managers to begin to establish a framework for better balancing the inherent tension between efficiency, risk-taking, and market stability associated with capital market financial innovations.

Suggested Citation

  • ., 2021. "Lessons learned from the birth, growth, and collapse of the municipal auction rate securities (MARS) market," Chapters, in: State and Local Financial Instruments, chapter 11, pages 164-185, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:19966_11
    as

    Download full text from publisher

    File URL: https://www.elgaronline.com/view/9781800370920.00017.xml
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:eechap:19966_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Darrel McCalla (email available below). General contact details of provider: http://www.e-elgar.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.