The Bank of England has this week opened a derivatives trading facility to support pension funds and liability-driven investment (LDI) managers at times of market stress.
Pension schemes will not be required to trade derivatives through central counterparties after the government extended a regulatory exemption indefinitely.
Investment professionals have played down the impact of rising bond yields on pension funds as the yield on the 10-year gilt hit its highest level since 2008 this week.
The Bank of England has published the results of a wide-ranging scenario analysis involving pension schemes, liability-driven investment strategies and insurers – and found that lessons have been learned from the 2022 gilts market shock.
Following recent warnings about a potential return of deflation, the onus is on LDI managers to ensure their portfolios are prepared.
Data from Bloomberg Intelligence suggests that DB schemes could sell out of the gilt market completely in seven years. But is it accurate?
A year on after the historic collapse and bailout of the gilt market, has the pensions industry learnt lessons?