CREDIT CLUSTER AND CONTAGION RISK RELATED TO DISTRESSED - - PowerPoint PPT Presentation

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Oct 13, 2023 126 likes •184 views

CREDIT CLUSTER AND CONTAGION RISK RELATED TO DISTRESSED MUNICIPALITIES BY RICHARD A. CICCARONE MERRITT RESEARCH SERVICES, LLC DISCUSSANT -- SHARON N. KIOKO UNIVERSITY OF WASHINGTON Chicago Public Other Public Public Schools

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CREDIT CLUSTER AND CONTAGION RISK RELATED TO DISTRESSED MUNICIPALITIES BY RICHARD A. CICCARONE MERRITT RESEARCH SERVICES, LLC

DISCUSSANT -- SHARON N. KIOKO UNIVERSITY OF WASHINGTON

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Illinois

Chicago

Public

Schools

Public Higher Ed

Cook County Other Counties

Chicago

Other Cities Medicaid Providers

RTA

McPier & Exposition Moral Obligation Econ Dev Other Public School

Districts

SLIDE 3

STATE METRO AREA? TOWN FIRE DISTRICT CITY SCHOOL DISTRICT SPECIAL DISTRICT COUNTY SCHOOL DISTRICT SPECIAL DISTRICT COUNTY? METRO AREA TOWN FIRE DISTRICT CITY SCHOOL DISTRICT SPECIAL DISTRICT

SLIDE 4

METRO AREA

TOWN A TOWN B CITY A CITY C CITY B

SLIDE 5

 Focus

 Cluster and contagion risk  Interdependencies (e.g., economic base, intergovernmental fiscal relationships)

 Contribution

 Substantial improvement over our current understanding of financial condition analysis  Model can be used by local governments to identify interdependencies and manage contagion

risk

 States could manage risk exposure (e.g., state guaranteed tax-supported debt, pension

liabilities)

 Limitation(s)

 Defining the relevant economic base and fiscal interdependencies  Model specification particularly on the fiscal interdependencies  Access to good data  Broader application may be limited (non-regional governments, small rural communities)