Europe | Monetary Policy & Inflation | UK
Last week’s mini-Budget prompted a pension meltdown on Wednesday, forcing the Bank of England to intervene in gilt markets as yields soared. In this article, guest author Eric Zijdenbos explains the liability-driven investment (LDI) strategy behind the mess – and the risks ahead.
Before we go into the detail of collateral issues, I will explain the general institutional landscape in the UK. I will put that in a global context and give further thoughts on the European institutional sector.
When I talk about the institutional sector, I principally refer to pension funds, life insurance companies and asset managers. We must be careful when calculating the total assets under management as there is potential for double counting. Pension funds outsource to insurance companies and asset managers.
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Excellent article EZ!