The Near Collapse of the UK Pension Sector Exposes Failures by Financial Regulators

The Near Collapse of the UK Pension Sector Exposes Failures by Financial Regulators

In an earlier article, I explained that the collapse in the long-dated UK government bond (or gilts) market on September 28 that followed the ill-fated Kwarteng “mini budget” of a few days earlier had exposed a hitherto underappreciated problem: UK pension schemes were massively exposed to changes in long-dated gilts rates.

The week after the mini budget, the gilts market became very unsettled. To quote the Financial Times:

Huge shifts in bond prices were leaving analysts and investors bewildered. “The moves in long-end yields were nothing short of incredible; the gilt market was in freefall,” said Daniela Russell,…

READ FULL ARTICLE

SOURCE | SUPPORT AUTHOR