UK Bond Market Chaos and Pension Scheme Vulnerability

The chapter explores the 2022 UK bond market chaos and its impact on pension schemes, highlighting the correlation between falling bond values and pension fund health. It delves into Liability-Driven Investment funds (LDIs) used by pension schemes, explaining how a decline in government bond prices can pressure LDIs and potentially lead to asset seizure. The discussion raises concerns about the looming financial crisis, the potential consequences of banks taking control of LDIs, and the lack of foresight from the Bank of England.