What a wonderful chart. If you do nothing else, play it as a video. Then consider the past two years and ask yourself
How did pension schemes get it so wrong?
We were given ample warning of the crisis that was to beset leveraged liability investment.
We did not have the governance measures in place to take hedges off before the gilt yields rose.
As a result billions of pounds of productive investment was lost to meet collateral calls
We believe we have escaped from this without damage, but in 2022 UK DB occupational pension schemes lost £600bn and the leverage nearly broke the market.
We must learn from this.
“ We believe we have escaped from this without damage, but in 2022 UK DB occupational pension schemes lost £600bn and the leverage nearly broke the market”
Who won?
“We believe we have escaped from this without damage, but in 2022 UK DB occupational pension schemes lost £600bn and the leverage nearly broke the market”
Could you expand on who profited from this mess
Two words missing from the headline – “private sector”!
Two words for the cause – “Government Interference.”
TPR misguided regulation.
Given that the prediction of rising rates was wrong for nearly a decade, why was the 2021 onwards prediction any more believable? Interesting though, is how the outcome seems to have ended at one extreme of the other of the prediction bundle.
On the same note, I recall seeing an animation of the development of the yield curve over the years – another graph that had an almost mainiacal thrashing about. Unfortunately I can’t find it now..