The Conference believes that analytical techniques that are widely - accepted by the capital markets, such as those used by the rating agencies to evaluate the financial stability
of municipal bond insurance companies, should be drawn upon to estimate the appropriate subsidy cost.
These doubts caused the State of New York to threaten to break up some or all of these insurers, separating the low
risk municipal bond insurance portfolios from other commitments in order to protect market access for thousands of state and local borrowers.
They will shrink and disappear, while new guarantors, who are all currently skeptical of doing much more than
Municipal bond insurance, will grow, and make it impossible for the old guarantors to return, because they are much better capitalized.
First, the real value of
the municipal bond insurance was not for credit enhancement.
Recently, Buffett's Berkshire Hathaway cut its exposure to
the municipal bond insurance market.