Cunliffe said that the BoE’s bond-buying programme is intended to give LDI funds the time they need to build resilience.
“LDI funds either need to inject capital from their DB pension fund investors or sell assets to reduce their leverage,” he said.
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The BoE, TPR and the FCA are watching LDI funds with the hope that they take the necessary measures to ensure they are “better prepared for future stresses given the current volatility of the market”, Cunliffe added.
The BoE’s Financial Policy Committee will publish its next ‘Financial policy summary and record’ on October 12. The Monetary Policy Committee will then meet on November 3.
Alex Janiaud is deputy editor at Pensions Expert, FTAdviser's sister publication
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