Municipal Market Advisors ( MMA), the leading independent municipal research firm since 1995, and Lumesis, a financial services technology company focused on the fixed income municipal marketplace, have put together a Frequently Asked Questions (FAQ) document to help banks better understand the regulatory guidance’s impact on municipal bond portfolios.
This summer, regulators released rules and guidance related to the Dodd-Frank Wall Street Reform and Consumer Protection Act that impact how banks select and monitor investment securities —including municipal bonds. “In the wake of the virtual disappearance of municipal-leveraged proprietary accounts, banking institutions became key lenders to states and municipalities in need of capital for infrastructure projects,” said Thomas G. Doe, founder and CEO of MMA. “The growth of bank participation in the municipal market has coincided with regulation, which became effective January 1, 2013. Banks are challenged to implement processes that facilitate their ability to communicate municipal portfolio credit risk in a cost effective yet thorough manner.”
“ MMA and Lumesis each offer value-added aspects of an overall solution to help banks address their new regulatory responsibilities,” said Gregg Bienstock, co-founder and CEO at Lumesis. “As banks prepare for their 2013 examination cycles, institutions are looking for cost-effective and comprehensive ways to prepare for discussions regarding their municipal portfolios. MMA and Lumesis recognized that innovative solutions were needed to address not only the banks’ needs but also their constrained budgets. We have leveraged our knowledge and technological expertise to help banks in a way that makes economic sense.”MMA’s Portfolio Credit Benchmark (PCB) solution addresses the need to review one’s municipal portfolio. MMA has developed a highly effective, risk management solution that empowers a bank to articulate its municipal portfolio credit risk to the regulatory examiner. PCB is powered by MMA’s real-time dataset of municipal bond default trends and supported by the leading credit team in the municipal industry. MMA’s Default Trends publication enables banks to follow troubled credits in the market and therefore be alerted each week should a bank’s holding present a meaningful risk. A municipal issue which MMA enters into its database has a much higher likelihood of migrating to a condition of severe impairment. DIVER’s Advisor Municipal Bond Report ( Ambr) supports pre-purchase analysis of municipal securities. Ambr is a CUSIP-based report that aggregates critical and timely information about every municipal bond and delivers sector-based demographic and economic data, ratings, default events, and trade history and location-based news links that can be accessed at or prior to a trade and any time thereafter. DIVER’s CDM Service delivers material event notifications for all positions within portfolios within minutes of their being filed with the MSRB allowing for the efficient tracking of material events of all bonds in the bank’s portfolio throughout the year. DIVER Analytics is a suite of powerful analytical and visualization tools serving Credit Analysts, Portfolio Managers and Risk Managers that generates detailed credit analysis by geography or CUSIP for your holdings. The DIVER suite of products leverages a database of over 225 datasets from more than 40 sources. About Municipal Market Advisors (MMA) Municipal Market Advisors ( MMA) is an independent research firm that was founded in 1995 and is based in Concord, Massachusetts. MMA’s core business is to provide strategic analysis and commentary on historical and quantitative conditions of the U.S. municipal market. In 2012, MMA introduced its newest service, an enterprise risk solution for bank portfolios to meet their regulatory needs pertaining to municipal bonds. MMA also provides in-depth analysis of critical issues confronting the municipal industry. MMA has played a prominent role in the media to inform the general public regarding issues in the industry as well as in Washington DC, interacting as an educational resource and consultant to lawmakers, lobbyists, regulators and think tanks. For additional information, please visit www.mma-research.com. About Lumesis, Inc. Lumesis is a Software-as-a-Service (SaaS), cloud-based financial technology company dedicated to delivering simple to use, powerful technology for the fixed income municipal marketplace. Lumesis’ DIVER platform, which includes DIVER Analytics, DIVER Advisor and DIVER Ambr, offers comprehensive data on more than 54,000 issuers within the municipal fixed income market. Through sophisticated analytical tools, real-time alerts, proprietary visualization technology and content-rich reporting, DIVER solutions allow professionals across the municipal market to easily identify portfolio risks and opportunities, improve customer satisfaction, ensure compliance and enable growth. Providing access to more than 225 datasets from more than 40 sources, DIVER solutions leverage the most current economic and demographic data available from both public and private sources. To learn more about Lumesis, please visit www.lumesis.com.
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