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Certificates of Participation and Capital Markets: Lessons from Brevard County and Richmond Unified School District
Author(s) -
Johnson Craig L.,
Mikesell John
Publication year - 1994
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/1540-5850.01011
Subject(s) - referendum , debt , business , accountability , capital market , sovereign debt , security market , finance , municipal bond , financial system , accounting , public administration , political science , law , sovereignty , politics
This article analyzes the genesis of certificates of participation (COP) in the municipal securities market. We document the trend in the use of COPs and illustrate problems in the market through case studies of the Richmond Unified School District default and the Brevard County referendum crisis. The valuable fiscal administration lessons drawn from the growing pains of a maturing sector of the municipal securities market can help municipal governments and investors avoid the tragic consequences that seem to inevitably accompany the circumvention of legal debt restrictions and public accountability.