Collateral Management

Pensions  ·  4 min read

LDI Strategy: What the 2022 Gilt Crisis Demonstrated About Collateral Adequacy

Liability-Driven Investment strategies are essential for managing DB scheme interest rate and inflation risk. The 2022 gilt crisis demonstrated at industry scale what happens when collateral buffers are insufficient — forced asset sales at distressed prices that crystallise losses and set back the endgame timeline by years.