{"id":565,"date":"2026-08-05T11:54:17","date_gmt":"2026-08-05T11:54:17","guid":{"rendered":"https:\/\/baarda.ch\/?p=565"},"modified":"2026-08-05T11:54:17","modified_gmt":"2026-08-05T11:54:17","slug":"so-that-means-the-zurcher-kantonalbank-is-a-very-big-bank","status":"publish","type":"post","link":"https:\/\/baarda.ch\/?p=565","title":{"rendered":"So that means the Zurcher kantonalbank is a very big bank?"},"content":{"rendered":"\n

Z\u00fcrcher Kantonalbank (ZKB) is indeed a significant institution\u2014it is the largest cantonal bank<\/strong> in Switzerland and the third-largest bank overall<\/strong> in the country, trailing only the UBS entities and the Raiffeisen group.<\/p>\n\n\n\n

ZKB Headquarters in Zurich. Bron: Z\u00fcrcher Kantonalbank<\/p>\n\n\n\n

What Makes ZKB So Large and Unique<\/h3>\n\n\n\n
    \n
  • Balance Sheet Size:<\/strong> With over CHF 200 billion<\/strong> in total assets and client assets under management exceeding CHF 450 billion<\/strong>, ZKB operates on a scale larger than most national banks in smaller European countries.<\/li>\n\n\n\n
  • Systemically Important Bank (SIB):<\/strong> The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank officially designate ZKB as one of Switzerland’s domestic systemically important banks<\/strong> («Too Big to Fail»), subjecting it to strict capital and liquidity requirements.<\/li>\n\n\n\n
  • State Guarantee (Staatsgarantie):<\/strong> ZKB is 100% owned by the Canton of Zurich. Under cantonal law, the Canton of Zurich guarantees all of ZKB’s liabilities. If the bank were ever unable to meet its obligations, the taxpayers of Zurich cover the shortfall.<\/li>\n\n\n\n
  • Top Credit Ratings:<\/strong> Because of its financial health and the full backing of Switzerland’s wealthiest canton, ZKB consistently receives AAA \/ Aaa<\/strong> credit ratings from major rating agencies (Standard & Poor’s, Moody’s, and Fitch)\u2014a higher rating than almost all private commercial banks globally.<\/li>\n\n\n\n
  • Regional Concentration:<\/strong> Despite its size, ZKB operates primarily within the Greater Zurich Area and Switzerland, functioning as a primary lender for local mortgages, small business financing, and regional retail banking, alongside a substantial asset management arm.<\/li>\n\n\n\n
  • Is it true that governments like to write out even 30 year bonds?<\/li>\n\n\n\n
  • Yes, it is true.<\/strong> Sovereign governments frequently issue 30-year bonds (and sometimes even longer maturities like 50-year or 100-year «ultra-long» bonds) as a core tool for managing national debt and public finance.<\/li>\n\n\n\n
  • The US Treasury, the UK (which calls them gilts<\/em>), France, Germany, Japan, and many other governments regularly auction 30-year paper.<\/li>\n\n\n\n
  • Why Governments Issue 30-Year Bonds<\/li>\n\n\n\n
  • Locking in Borrowing Costs for Decades:<\/strong> By issuing ultra-long debt, a government locks in a fixed interest rate (coupon) for 30 years. If interest rates are low, this allows debt management offices to fund long-term commitments cheaply without having to refinance every few years.<\/li>\n\n\n\n
  • Matching Infrastructure Horizons:<\/strong> Governments finance long-term public assets\u2014such as national railways, bridges, power grids, and defense infrastructure\u2014that yield benefits over several decades. Paying off those assets over a 30-year horizon aligns the life of the asset with the financing term.<\/li>\n\n\n\n
  • Reducing Refinancing Risk:<\/strong> If a government relies exclusively on 2-year or 5-year bonds, it has to constantly issue new debt to pay off maturing debt («rollover risk»). Spreading debt maturity out to 30 years means a smaller percentage of national debt comes due in any single year.<\/li>\n\n\n\n
  • Satisfying Institutional Demand (Pension Funds & Insurers):<\/strong> Life insurance companies and pension funds have long-term liabilities\u2014they need to pay out pensions to retirees 20 to 40 years in the future. They actively demand ultra-long government bonds because these risk-free assets guarantee fixed cash flows that match their long-term obligation timelines.<\/li>\n\n\n\n
  • Do Governments Ever Issue Longer<\/em> Than 30 Years?<\/li>\n\n\n\n
  • Yes. While 30 years is the standard benchmark for long-term sovereign debt, several countries have gone even further:<\/li>\n\n\n\n
  • 50-Year Bonds:<\/strong> Issued by countries like France, Italy, Spain, and the UK.<\/li>\n\n\n\n
  • 100-Year Bonds (Century Bonds):<\/strong> Austria famously issued 100-year bonds in 2017 and 2020 at record-low interest rates (~0.88% to 1.2%). Mexico, Argentina, and Ireland have also experimented with 100-year debt.<\/li>\n\n\n\n
  • Trade-offs for the Government<\/li>\n\n\n\n
  • Higher Interest Rates (Term Premium):<\/strong> Under normal economic conditions, investors demand a slightly higher yield (interest rate) to tie up their money for 30 years compared to 5 or 10 years.<\/li>\n\n\n\n
  • Inflation Risk for Investors:<\/strong> 30 years is a long time for inflation to erode purchasing power, making long-term bonds particularly sensitive to changing interest rate environments.<\/li>\n<\/ul>\n\n\n\n

    Can you make a list of the top 25 countries that get like the lowest interest they have to pay over 30 year bonds?<\/p>\n\n\n\n

    The interest rate a country pays on its 30-year government bonds (its 30-year bond yield) reflects market expectations of long-term inflation, currency stability, economic growth, and sovereign default risk.<\/p>\n\n\n\n

    Governments with strong fiscal discipline, low inflation, and highly stable currencies pay the lowest interest rates. Below is a table ranking 25 major countries with the lowest 30-year government bond yields<\/strong>, ordered from lowest borrowing cost to higher.<\/p>\n\n\n\n

    Top 25 Countries with the Lowest 30-Year Bond Yields<\/h3>\n\n\n\n
    Rank<\/th>Country<\/th>Approx. 30Y Bond Yield (%)<\/th>Currency<\/th>Primary Driving Factors<\/th><\/tr><\/thead>
    1<\/strong><\/td>Switzerland<\/strong><\/td>0.8% \u2013 1.2%<\/strong><\/td>CHF<\/td>Exceptionally low inflation, strong Swiss Franc, «safe haven» capital inflow.<\/td><\/tr>
    2<\/strong><\/td>China<\/strong><\/td>2.0% \u2013 2.3%<\/strong><\/td>CNY<\/td>Low domestic inflation, strong domestic bank demand for long-term debt.<\/td><\/tr>
    3<\/strong><\/td>Taiwan<\/strong><\/td>2.0% \u2013 2.4%<\/strong><\/td>TWD<\/td>High domestic savings rate, persistent current account surplus.<\/td><\/tr>
    4<\/strong><\/td>Thailand<\/strong><\/td>2.6% \u2013 2.9%<\/strong><\/td>THB<\/td>Low inflation, high central bank reserve accumulation.<\/td><\/tr>
    5<\/strong><\/td>Denmark<\/strong><\/td>2.9% \u2013 3.2%<\/strong><\/td>DKK<\/td>AAA credit rating, currency pegged to Euro, robust fiscal position.<\/td><\/tr>
    6<\/strong><\/td>Sweden<\/strong><\/td>3.0% \u2013 3.3%<\/strong><\/td>SEK<\/td>Low sovereign debt-to-GDP ratio, strong fiscal framework.<\/td><\/tr>
    7<\/strong><\/td>Singapore<\/strong><\/td>3.0% \u2013 3.4%<\/strong><\/td>SGD<\/td>AAA credit rating, massive sovereign wealth funds (GIC\/Temasek).<\/td><\/tr>
    8<\/strong><\/td>Germany<\/strong><\/td>3.3% \u2013 3.6%<\/strong><\/td>EUR<\/td>The Eurozone\u2019s AAA benchmark safe-haven asset (Bunds<\/em>).<\/td><\/tr>
    9<\/strong><\/td>Netherlands<\/strong><\/td>3.3% \u2013 3.6%<\/strong><\/td>EUR<\/td>AAA credit rating, strong institutional pension fund demand.<\/td><\/tr>
    10<\/strong><\/td>Ireland<\/strong><\/td>3.4% \u2013 3.7%<\/strong><\/td>EUR<\/td>Strong corporate tax revenues, rapid debt-to-GDP reduction.<\/td><\/tr>
    11<\/strong><\/td>Austria<\/strong><\/td>3.5% \u2013 3.8%<\/strong><\/td>EUR<\/td>AA+ rated core Eurozone issuer with high institutional demand.<\/td><\/tr>
    12<\/strong><\/td>Portugal<\/strong><\/td>3.6% \u2013 3.9%<\/strong><\/td>EUR<\/td>Massive fiscal turnaround and rapid debt reduction over recent years.<\/td><\/tr>
    13<\/strong><\/td>Finland<\/strong><\/td>3.6% \u2013 3.9%<\/strong><\/td>EUR<\/td>High credit quality and stable European institutional integration.<\/td><\/tr>
    14<\/strong><\/td>Canada<\/strong><\/td>3.6% \u2013 4.0%<\/strong><\/td>CAD<\/td>AAA sovereign rating, large domestic institutional market.<\/td><\/tr>
    15<\/strong><\/td>Spain<\/strong><\/td>3.8% \u2013 4.1%<\/strong><\/td>EUR<\/td>Robust post-pandemic GDP growth offsetting higher debt levels.<\/td><\/tr>
    16<\/strong><\/td>Belgium<\/strong><\/td>3.8% \u2013 4.1%<\/strong><\/td>EUR<\/td>Core Eurozone economy with strong domestic household wealth.<\/td><\/tr>
    17<\/strong><\/td>Japan<\/strong><\/td>3.8% \u2013 4.1%<\/strong><\/td>JPY<\/td>Yields have risen from historical zero levels due to Bank of Japan policy normalization.<\/td><\/tr>
    18<\/strong><\/td>South Korea<\/strong><\/td>4.0% \u2013 4.3%<\/strong><\/td>KRW<\/td>Solid macroeconomic fundamentals, though yields reflect higher short-term rates.<\/td><\/tr>
    19<\/strong><\/td>Israel<\/strong><\/td>4.1% \u2013 4.5%<\/strong><\/td>ILS<\/td>Strong tech-driven economy, though risk premiums fluctuate with regional events.<\/td><\/tr>
    20<\/strong><\/td>France<\/strong><\/td>4.3% \u2013 4.7%<\/strong><\/td>EUR<\/td>Large liquid market, though political budget debates have added a small premium.<\/td><\/tr>
    21<\/strong><\/td>Italy<\/strong><\/td>4.4% \u2013 4.8%<\/strong><\/td>EUR<\/td>Higher national debt ratio requires offering higher yields to attract buyers.<\/td><\/tr>
    22<\/strong><\/td>United Kingdom<\/strong><\/td>4.8% \u2013 5.1%<\/strong><\/td>GBP<\/td>Higher inflation stickiness and heavy gilt supply pushing up yields.<\/td><\/tr>
    23<\/strong><\/td>United States<\/strong><\/td>5.0% \u2013 5.3%<\/strong><\/td>USD<\/td>Massive government deficit spending and heavy Treasury issuance elevating term premiums.<\/td><\/tr>
    24<\/strong><\/td>New Zealand<\/strong><\/td>5.0% \u2013 5.3%<\/strong><\/td>NZD<\/td>Smaller market size with yields closely linked to global capital costs.<\/td><\/tr>
    25<\/strong><\/td>Australia<\/strong><\/td>5.1% \u2013 5.4%<\/strong><\/td>AUD<\/td>AAA sovereign rating, but higher domestic cash rates drive long-term yields up.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    What Enables a Country to Borrow Cheaply for 30 Years?<\/h3>\n\n\n\n
      \n
    1. Low Structural Inflation:<\/strong> A 30-year bond’s fixed return can easily be wiped out by inflation. Investors in Swiss or Danish debt accept tiny yields because they trust those currencies will hold purchasing power over decades.<\/li>\n\n\n\n
    2. Local Institutional Demand:<\/strong> Countries with massive private pension funds or life insurance sectors (e.g., the Netherlands, Switzerland, Singapore) have a guaranteed domestic buyer base that must<\/em> hold ultra-long government paper to match future retirement payouts.<\/li>\n\n\n\n
    3. Fiscal Reserve Rules:<\/strong> Nations with strict debt-limit laws or massive sovereign wealth reserves carry virtually zero default risk, lowering the premium investors demand.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

      Z\u00fcrcher Kantonalbank (ZKB) is indeed a significant institution\u2014it is the largest cantonal bank in Switzerland and the third-largest bank overall in the country, trailing only the UBS entities and the Raiffeisen group. ZKB Headquarters in Zurich. Bron: Z\u00fcrcher Kantonalbank What Makes ZKB So Large and Unique Can you make a list of the top 25 … <\/p>\n

      «So that means the Zurcher kantonalbank is a very big bank?»<\/span> weiterlesen<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-565","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/posts\/565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/baarda.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=565"}],"version-history":[{"count":1,"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/posts\/565\/revisions"}],"predecessor-version":[{"id":566,"href":"https:\/\/baarda.ch\/index.php?rest_route=\/wp\/v2\/posts\/565\/revisions\/566"}],"wp:attachment":[{"href":"https:\/\/baarda.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baarda.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baarda.ch\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}