Municipal bonds won’t be treated as High Quality Liquid Assets (HQLA) if the current formulation for new banking capital requirements goes into effect, but many banks and financial analysts are arguing that this is unreasonable. The goal of having HQLA on hand is to ensure that banks remain solvent whenever the next crisis hits, and Citi analyst George Friedlander thinks munis fit the bill. Municipal bonds given HQLA status “Municipal bonds compare favorably with many of the sectors that were given status as HQLA, including corporate bonds, S&P 500 stocks, and foreign sovereign debt,” writes Friedlander. “We believe that an…