The central bank said Wednesday that UK banks had enough financial resources to avoid shocks but the pensions regulator needed to move “as soon as possible” to increase the resilience of liability-driven investment funds. These “LDI” funds, which many UK pension schemes invest in, proved particularly vulnerable when the British bond market came under enormous strain following then-Prime Minister Liz Truss’s disastrous budget six months ago.
“We will be issuing updated guidance on LDI in April, taking into consideration the FPC’s recommendations,” he said. LDI crisis The role of LDI funds in the UK financial system was thrown into the spotlight in the fall after the Truss budget triggered an unprecedented selloff in UK government bonds. This had an alarming knock-on effect on pension funds that had gone all in on liability-driven investment strategies. Suddenly, they were asked to pony up billions of pounds in collateral.
Thanks Biden! Lots wasteful government spending is the cause of our current inflation.
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