New Management Science Findings from Federal Reserve Bank of Chicago Outlined (Limits of Disclosure Regulation In the Municipal Bond Market): Business – Management Science

2025 JUN 05 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Researchers detail new data in Business - Management Science. According to news reporting out of Chicago, Illinois, by NewsRx editors, research stated, “We examine the effectiveness of recent federal disclosure regulation aiming to improve transparency in the $4 trillion municipal bond market. Governments fail to disclose material private placements 50%-60% of the time and, conditional on disclosure, filings often omit contract details essential for bond pricing.”

Financial support for this research came from German Research Foundation (DFG).

Our news journalists obtained a quote from the research from the Federal Reserve Bank of Chicago, “Noncompliant issuers are significantly riskier than compliers, with disclosure decreasing in the potential of privately placed debt to adversely affect bondholders. We show that disclosure reveals positive news and is especially informative to investors in low-rated bonds or during market crises.”

According to the news editors, the research concluded: “Overall, privately placed debt continues to pose significant risks to municipal bond investors.”

This research has been peer-reviewed.

For more information on this research see: Limits of Disclosure Regulation In the Municipal Bond Market. Management Science, 2025. Management Science can be contacted at: Informs, 5521 Research Park Dr, Suite 200, Catonsville, MD 21228, USA.

Our news journalists report that additional information may be obtained by contacting Ivan T. Ivanov, Federal Reserve Bank of Chicago, Division of Research, Chicago, IL 60604, United States. Additional authors for this research include Tom Zimmermann and Nathan W. Heinrich.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1287/mnsc.2022.02289. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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