As concerns rise about the state of America’s cities and the bond markets where they raise money, federal regulators on Tuesday called for broad reforms, while noting that some of the most rudimentary changes would require an act of Congress.
The Securities and Exchange Commission said, for example, thatmunicipal bond investors were entitled to basics like audited financial statements — something investors in stocks take for granted — but said it could not force municipalities to undergo audits unless Congress gave it that power.
“We think we’re at the edge of the current authority that we have,” said an S.E.C. commissioner, Elisse Walter, in a conference call with journalists to explain the content of a 165-page report on the municipal securities market and the commission’s recommendations. As a practical matter, Congress does not typically amend the federal securities laws unless faced with a crisis.