
Second Edition: Credit and Liquidity Premiums in the Swiss Capital Market
Published on 29.09.2025 CEST
Microsite: Credit and Liquidity Premiums 2025: The Swiss Capital Market in Transition
The Swiss capital market presents a noticeably different picture in 2025: While interest rates have returned to 0% following the SNB's key interest rate decision, credit and liquidity premiums have risen significantly across all market segments – both in the public bond market and in private placements.
What is driving this development?
- Geopolitical uncertainties (e.g., US tariffs)
- New regulatory requirements (Basel III final)
- Decline in interest rates → Investors demand higher risk premiums
- Higher capital requirements for banks
- Growing importance of liquidity management
Public vs. Private Capital Market
The public bond market remains attractive despite rising spreads – particularly for institutional investors focused on liquidity and transparency. In 2024, the volume of new issuances amounted to CHF 78.5 billion.
At the same time, the private market continues to grow: Around CHF 54 billion in volume was concluded in the primary market through private placements (PPs) on cosmofunding – with attractive liquidity premiums that are significantly higher than those of public bonds.
Private Placements as a Source of Alpha
PPs offer a standardized capital market structure (ISIN, custody eligibility, rating) but significantly higher risk premiums. This is particularly true in sectors such as:
- Public entities (cantons, cities, municipalities)
- State-affiliated enterprises (e.g., hospitals, energy providers)
- Real estate financing and funds
The analysis shows that the liquidity premium is often significant, especially for longer maturities or less frequently traded issuers.
New Developments
Innovative products, such as a CHF money market fund based on PPs, demonstrate that daily liquidity and professional risk management are also possible in the private market. Digitalization further supports more efficient access for issuers and investors.
Conclusion
Despite the increased attractiveness of public bonds, the private market continues to offer substantial alpha opportunities, particularly through liquidity premiums. Those who strategically allocate capital today should combine both markets to optimize diversification, returns, and flexibility.
Published on 29.09.2025 CEST