Fed says municipal market liabilities dip by $52.6 billion in quarter

By Jennifer Chiou

New York, June 7 - Total liabilities in the municipals market declined by $52.6 billion during the first 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 outpaced the $14.7 billion decline recorded for the fourth quarter of last year as well as the $9.6 billion drop from the third quarter of 2011.

In the first quarter, municipals held by the household sector dropped by $195.1 billion on a seasonally adjusted annual and net basis. This decline followed a $135.5 billion dip in the prior quarter.

Further, money market mutual funds slipped $27.1 billion in the first quarter, while property-casualty insurance companies gained a net $16.7 billion of the municipal securities and loans.

On a seasonally adjusted annualized and net basis, holdings increased by $83.1 billion for mutual funds, increased by $35.5 billion for U.S.-chartered commercial banks and rose by $12.8 billion for brokers and dealers.

The total amount of municipal securities and loans outstanding was $3.4 trillion at the end of the quarter.

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