IDEAS home Printed from https://ideas.repec.org/a/fip/fedfel/91528.html
   My bibliography  Save this article

Exploring the Safety Premium of Safe Assets

Author

Listed:
  • Jens H. E. Christensen
  • Nikola Mirkov

Abstract

Investors are usually willing to pay a higher price, known as a premium, for a safe fixed-income asset in return for the convenience of its high quality and liquidity. A study of Swiss government bonds—widely considered to be extremely safe but not particularly liquid—can give some insights into how quality affects the premium. The large and variable safety premium of these bonds surged to persistently higher levels following the launch of the euro. However, subsequent large asset purchases by the European Central Bank depressed the safety premium.

Suggested Citation

  • Jens H. E. Christensen & Nikola Mirkov, 2021. "Exploring the Safety Premium of Safe Assets," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2021(13), pages 01-05, May.
    • Handle: RePEc:fip:fedfel:91528
    as

    Download full text from publisher

    File URL: https://www.frbsf.org/economic-research/files/el2021-13.pdf
    File Function: Full text – article PDF
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfel:91528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.