LDI crisis could ‘certainly happen again’, pensions experts say

Wave of issuance and a shrinking buyer base likely to spur further volatility in gilts

giant wave

Rising volatility in the £2.1 trillion ($2.5 trillion) UK government bond market could spark a repeat of last year’s crisis in liability-driven investment (LDI) strategies that unleashed a wave of collateral calls against pension schemes, asset managers and consultants have warned.

A glut of new gilt issuance from the UK treasury as traditional buyers of gilts pull back could thin liquidity and spark sharp moves in yields.

“Rates have shown they can be incredibly volatile,” said Jeremy Rideau

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