Matt Fabian, managing director of Municipal Market Advisors, a Massachusetts research firm, puts it bluntly: “The municipal bond industry is the backwater of the financial markets because it was designed that way.”

Although with $2,700bn (£1,640bn, €1,880bn) of bonds outstanding it had become a decidedly big backwater, for years the market where US state and local governments raise money for everything from roads and sewers to schools and sports stadiums operated with hardly a hitch. Default rates were low, many prices barely moved and bonds of some of the 50,000 issuers did not trade at all.