Thursday, April 24, 2025

BoE to stress test non-banks for first time after pensions turmoil

Investment funds and other non-bank financial institutions face their first “stress test” in 2023 to apply lessons from the near-meltdown in Britain’s pension fund sector, the Bank of England (BoE) said in December.

The BoE had to step in from September to buy £19.3bn of government bonds to stabilise markets after turmoil caused by the fiscal plans of Liz Truss’s short-lived government. Liability-driven investment (LDI) funds, used by pension funds to ensure their long-term payouts, struggled to meet collateral calls as bond prices tumbled.

The BoE’s Financial Policy Committee (FPC), which monitors the financial system for risks, recently said that the LDI crisis showed the need to test how non-bank financial institutions (NBFI) cope with stresses. “The Bank will run, for the first time, an exploratory scenario exercise focused on NBFI risks, to inform understanding of these risks and future policy approaches,” the FPC said in its half-yearly Financial Stability Report.

Further details will be set out in the first half of 2023.

Latest

Why ‘Awful April’ can be a springboard for success

The recent tariffs imposed by the Trump administration have...

Shanghai to launch visa-free business zone near Pudong airport

Shanghai will open a new international business zone near...

New polling: Business attitudes to renewable energy shift reach global tipping point

Polling conducted across key economies and emerging markets underscores...

Has online shopping lost its mojo?

‘Discovery’ is the missing piece in the ecommerce jigsaw,...

Subscribe To Our Content

Don't miss

Why ‘Awful April’ can be a springboard for success

The recent tariffs imposed by the Trump administration have...

Shanghai to launch visa-free business zone near Pudong airport

Shanghai will open a new international business zone near...

New polling: Business attitudes to renewable energy shift reach global tipping point

Polling conducted across key economies and emerging markets underscores...

Has online shopping lost its mojo?

‘Discovery’ is the missing piece in the ecommerce jigsaw,...

A quantum leap in the commercialisation of quantum sensors

Bosch has established a company with the synthetic diamond...

Why ‘Awful April’ can be a springboard for success

The recent tariffs imposed by the Trump administration have reinforced April’s reputation as a month of upheaval – but it can also be a...

Shanghai to launch visa-free business zone near Pudong airport

Shanghai will open a new international business zone near Pudong airport with visa-free access by the end of this year to boost global connectivity...

New polling: Business attitudes to renewable energy shift reach global tipping point

Polling conducted across key economies and emerging markets underscores an accelerating corporate shift away from fossil fuels towards renewables A landmark global poll of business...

LEAVE A REPLY

Please enter your comment!
Please enter your name here