LDI Crisis UK: Systemic Failure, Not Just Leverage
Understanding the 2022 UK Pension Fund Crisis The September 2022 turmoil in the UK gilt market, often dubbed the "LDI crisis," exposed systemic weaknesses beyond simple over-leverage in Liability-Driven Investment (LDI) strategies. This wasn't merely a debt crisis; it was a liquidity crisis amplified by poor communication, inadequate risk management, and slow responses within the pension system. The crisis highlighted the urgent need for improved stress testing, enhanced regulatory oversight, and a reassessment of LDI strategies' risk profiles....