Are we doubling down on systemic risk in pensions?
Stand by for the big deadline. After a week of emergency moves and mangled communication, the Bank of England underlined its intention to stop emergency purchases of gilts as scheduled on Friday.
Defined benefit pensions funds are still scrambling to sell assets to meet collateral calls on so-called liability-driven investments (LDI). The gilts market is fragile, with fears of more market volatility once the Bank’s safety net is withdrawn.
There is also a lower-profile deadline approaching next week. It falls squarely into the wonky world of pensions policy that, until recently, would largely have been ignored (or dismissed as desperately boring). But it is causing consternation and has direct links to the current crisis.
This story originally appeared on: Financial Times - Author:Helen Thomas
