Which organizations are responsible for assessing the financial stability of municipalities?

Credit rating agencies are primarily responsible for evaluating the financial stability of municipalities. They analyze various factors, such as economic conditions, financial health, debt levels, tax base stability, and management practices, to assign credit ratings. These ratings provide investors and stakeholders with insights into the creditworthiness of a municipality, influencing its ability to issue bonds and secure financing.

While local government associations may provide support and resources to municipalities and state treasurers have oversight responsibilities for state-level financial matters, they do not specifically assess financial stability in the same way credit rating agencies do. Private auditing firms conduct financial audits and ensure compliance with accounting standards, but their role is more focused on verifying the accuracy of financial statements rather than assessing ongoing financial stability. Therefore, credit rating agencies stand out as the key organizations dedicated to this specific evaluation of municipal financial health.