Determinants of municipal loan spreads: empirical evidence from Switzerland

Determinants of municipal loan spreads: empirical evidence from Switzerland This is the first study to investigate the determinants of risk premia paid by Swiss municipalities in the German-speaking part of Switzerland. This paper draws on a unique data set for Swiss municipalities collected during four surveys. Our results show that fiscal soundness has almost no impact on risk premia and that the introduction of a no-bailout policy did not result in higher spreads. On the other hand, investors’ general risk aversion, as well as interest rate levels, are strongly related to spread levels. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Financial Markets and Portfolio Management Springer Journals

Determinants of municipal loan spreads: empirical evidence from Switzerland

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Publisher
Springer Journals
Copyright
Copyright © 2018 by Swiss Society for Financial Market Research
Subject
Business and Management; Business and Management, general; Finance, general; Management
ISSN
1934-4554
eISSN
2373-8529
D.O.I.
10.1007/s11408-018-0307-6
Publisher site
See Article on Publisher Site

Abstract

This is the first study to investigate the determinants of risk premia paid by Swiss municipalities in the German-speaking part of Switzerland. This paper draws on a unique data set for Swiss municipalities collected during four surveys. Our results show that fiscal soundness has almost no impact on risk premia and that the introduction of a no-bailout policy did not result in higher spreads. On the other hand, investors’ general risk aversion, as well as interest rate levels, are strongly related to spread levels.

Journal

Financial Markets and Portfolio ManagementSpringer Journals

Published: May 14, 2018

References

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