Financial Markets and Portfolio Management

, Volume 32, Issue 2, pp 143–166 | Cite as

Determinants of municipal loan spreads: empirical evidence from Switzerland

  • Fabio SigristEmail author
  • Patrick Köchli
  • Christoph Lengwiler


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.


Regional public finances Credit risk Interest rates Government debt Bail out Fiscal policy 

JEL Classification

E43 E62 H63 H74 



We thank two anonymous referees for helpful comments and suggestions.


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Copyright information

© Swiss Society for Financial Market Research 2018

Authors and Affiliations

  1. 1.Institute of Financial Services Zug (IFZ)Lucerne University of Applied SciencesZugSwitzerland

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