Ironically, concern among EMDEs over the past five years has focused mainly on the problems associated with too much monetary easing in advanced economies. Negative spillover effects in the form of excessive capital inflows and upward pressure on their exchange rates have at times made it difficult for them to control domestic credit conditions and have threatened their international competitiveness.
This rapid recovery also led to record new issuance with increased demand from municipal investors, including very strong inflows to municipal bond funds, and improved secondary market conditions. Ultimately, the increased availability of credit to municipal borrowers helped them maintain employment and capacity by avoiding forced cutbacks in payrolls and other critical operations.