How pensions were ‘hit by hurricane’: Banker behind LDI strategy that needed Bank bailout says it was not designed to withstand ‘ferocity’ of gilt sell-off

by Boo_Randy

If the complacent sheeple realized their pension funds, and our entire financial system, were a house of cards, how many of them would be stacking the shiny?

www.dailymail.co.uk/money/markets/article-11276197/LDI-not-designed-withstand-ferocity-gilt-market-sell-off.html

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A banker who helped to design the pension investment strategy that nearly collapsed last week said it was not designed to withstand the ‘ferocity’ of the gilt market sell-off that pushed it to the brink.

Dawid Konotey-Ahulu, one of the architects of liability-driven investing (LDI), defended the strategy and said it had ‘helped stabilise pension funding over the past two decades’.

LDI funds linked to millions of final salary retirement schemes teetered on the brink of default after a bond market sell-off in the wake of Kwasi Kwarteng’s mini-Budget.

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