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Video: How Do Governments Borrow Money?

A video explainer on the mechanics and players that make the $3.7 trillion municipal bond market work.

finance101_borrow
 

This is part of an ongoing series called Finance 101 that goes back to the basics to help public officials.

Local and state governments rely on the $3.7 trillion municipal market to borrow money affordably and pay for big projects like roads, bridges and new schools.

The interest rate they pay to borrow is tied to their credit worthiness. But how exactly does this whole process work and who are the players that help governments borrow money?

As part of our continuing Finance 101 series, this explainer breaks down the basic steps a municipality takes when it goes to market, who is involved in that process and what a government's responsibilities are in this new era of market transparency.
 

Liz Farmer, a former Governing staff writer covering fiscal policy, helps lead the Pew Charitable Trusts’ state fiscal health project’s Fiscal 50 online resource.
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