BoE intervention whipsaws pension funds that dumped hedges

Unhedged funds saw liabilities rise by up to 20% when rates pulled back

Bank of England

For some UK pension funds the pain of this week’s chaos in UK gilts went beyond margin calls of hundreds of millions of pounds.

After the Bank of England intervened on September 28 to buy long-dated bonds, collapsing yields caused the funding status of some schemes to deteriorate by as much as a fifth.

Long-dated gilt yields fell dramatically following the BoE’s announcement, from 5.12% on Wednesday morning to 3.92% at the close of trading, according to data from Bloomberg. For pension funds

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

If you already have an account, please sign in here.

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: