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"This paper analyzes the growth and composition of the Swiss bond market during the past twenty-five years. It captures the reasons why the Swiss debt security market is mainly composed by private sector debt securities and international debt securities, which is contrary to most of the other advanced economies. The research identifies three preconditions that bond markets require to be fully developed. Respectively, countries need a sound macroeconomic environment, a well-functioning legal system, and a high level of financial infrastructure in order to nurture fixed-income markets. Switzerland benefits from very stable macroeconomic policies, an extremely efficient legal system, and one of the most developed financial infrastructures around the globe. Therefore, the Swiss Confederation has a very developed debt security market, which results in its particular composition, since the large private, foreign sector component of the Swiss bond market is an outgrowth of and a logical next step in the development of the Swiss financial sector."
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