Fed says municipal market liabilities decrease by $7.5 billion

By Jennifer Chiou

New York, Sept. 25 - Total liabilities in the municipals market decreased by $7.5 billion during the second quarter of 2013 on a seasonally adjusted annualized and net basis, according to the Z.1 flow and outstandings report released by the Federal Reserve on Wednesday.

The decrease compares to the $14.2 billion increase recorded during the first quarter of 2013 and the $12.4 billion rise recorded in the second quarter of 2012.

In the second quarter, municipals held by money market mutual funds fell by $3 billion on a seasonally adjusted annual and net basis. Also reported changes were nonfinancial corporate businesses (up $4.6 billion), the household sector (down $15.5 billion), the rest of the world (down $4.5 billion) and property-casualty insurance companies (up $900 million).

On a seasonally adjusted annualized and net basis, holdings increased by $16.1 billion for U.S.-chartered commercial banks, decreased $5.4 million for mutual funds, increased $8.6 billion for government-sponsored enterprises and fell $12 billion for brokers and dealers.

The total amount of municipal securities and loans outstanding lowered to $3.72 trillion at the end of the quarter from $3.73 trillion during the first quarter of the year.

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