A municipal bank is a local government-owned depository financial institution established, capitalized, and operated by a city or municipal authority to serve public policy goals rather than maximizing private shareholder profits. These specialized banks are designed to support local economic development by providing affordable banking services to underserved neighborhoods, funding public infrastructure projects, offering low-cost credit to small businesses, and keeping municipal tax revenues circulating within the local economy rather than flowing into large commercial financial centers. While common in various European and international jurisdictions, they operate under strict regulatory frameworks to ensure fiscal responsibility and safety of public deposits.