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Mr. Montgomery said he was unaware of the bond guarantee involving the state pension fund.
Healthier banks, meanwhile, have already cut back on their use of the bond guarantee program.
Ending a Guarantee The government's bank bond guarantee plan has been a big success.
Now, there's no remaining need for the bond guarantee program, and officials should wind it down.
The ADB will also be able to build on its role in developing regional bond markets through the creation of a corporate bond guarantee scheme.
The state education agency is also auditing the district's use of bond money, according to a January letter addressed to Mr. Thomas, which questions whether the district has complied with state law governing Texas' bond guarantee program.
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In other places, bond guarantees have been time bombs, causing problems too severe to be solved in a workout.
Investors find a bond guaranteed to lose value — but not to lose all value — to be worth buying.
On Dec. 31, 2007, the city's bonds and bond guarantees for its agencies totaled about $500 million, many times its revenue of about $61 million, the S.E.C. said.
Without bond guarantees, private investors, which so far seem more prone to due diligence than the California High-Speed Rail Authority, have yet to put up money.
Germany and the other Northern European countries know that eventually there will be some kind of financial solution, such as bond guarantees or jointly issued euro bonds, said Clemens Feust, a professor at Oxford University who has advised the German Finance Ministry.
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