UK watchdog tells pension funds to focus on building buffers

[admin]

Britain's financial watchdog told pension funds on Wednesday to "really focus" on building up liquidity in their liability-driven investment (LDI) strategies before the Bank of England ends support for the government bond market on Friday. UK government bond yields began surging last month after Britain announced a package of unfunded tax cuts. This forced the Bank of England to buy gilts to ease pressure on pension funds facing big collateral calls on derivatives in their LDI funds.