One area we’ve been keenly interested in is the impact of this pandemic on state, and especially local government — which has largely been caught off guard by the unprecedented policy measures taken by the states.
Governing Magazine published an interesting article about how local governments can be more prepared for such an event in the future — and we anticipate this to become some form of requirement.
It’s no secret the municipal bond market was already long overdue for disruption, and now it seems to be locked up in the iceberg of credit market winter. We see opportunities for smart financial institutions to develop more efficient public finance products for local governments during this crunch.
Internally we’ve discussed multiple ideas and already have solid traction in some areas:
- State treasurers coming to the table with guarantees for local government borrowing from non-traditional sources of cash (of course this is scary considering Senator Mitch McConnell’s recent ideas to let states go bankrupt)
- Technology-driven sourcing of bond funding from non-traditional investment banking channels
- Pandemic or disaster bonds to cover these kinds of black swan events for continued operations of critical services
- Local schools divesting away from physical real estate infrastructure to incorporate digital learning models
- Inventory tracking & coordination of emergency prep resource availability across regions to be more effective in planning & stockpiling
Even in disasters, there are huge opportunities for smart folks who can create solutions!