Defaults by U.S. states and cities are rare, but have happened:
After a banking crisis, Illinois, Pennsylvania, Michigan, Indiana, Maryland, Mississippi, Arkansas, Louisiana and Florida defaulted on their debt.
After the Civil War, roughly a quarter of the municipal debt in the U.S. was in technical default.
In the wake of the Great Depression, Arkansas defaulted in 1933. Over an eight-year period, 14 per cent of counties and 9 per cent of municipalities defaulted.
In 1978, Cleveland became the first major U.S. city since the Great Depression to default on its debt; New York City narrowly averted default three years earlier
Sources: Citigroup, Case Western University, University of Maryland
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