The risk exposure of American banks to municipal bonds has been reduced to the lowest level since the financial crisis.

Despite the attractive valuation of municipal bonds and the large volume of new bond issuances, the share of state and local government bonds held by Bank of America is still at its lowest level since the financial crisis. According to analysis of second quarter Federal Deposit Insurance Corporation data by the municipal market analysis company, banks collectively hold nearly $295 billion in securities and around $190 billion in direct municipal loans. This means that municipal securities account for approximately 1.18% of total bank assets, the lowest level since the financial crisis.