Fed says municipal market liabilities dip by $6.8 billion in quarter

By Jennifer Chiou

New York, Dec. 6 - Total liabilities in the municipals market declined by $6.8 billion during the third quarter of 2012 on a seasonally adjusted annualized and net basis, according to the Z.1 flow and outstandings report released by the Federal Reserve on Thursday.

The margin compares to the $15.1 billion decline recorded for the same quarter of last year and the $109.7 billion inflow seen last quarter.

In the third quarter, municipals held by the household sector dropped by $245.5 billion on a seasonally adjusted annual and net basis. This decline followed a $3.5 billion dip in the prior quarter.

Further, money market mutual funds slipped $25.8 billion in the third quarter, while property-casualty insurance companies gained a net $1.8 billion of the municipal securities and loans.

On a seasonally adjusted annualized and net basis, holdings increased by $108.3 billion for mutual funds, increased by $90.7 billion for U.S.-chartered commercial banks and slipped by $8.5 billion for brokers and dealers.

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