‘Systemic shocks should be anticipated’: how will the financial system fare in 2024? Financial system Although interest rates are unlikely to go any higher, risks remain as borrowers will continue to roll off contracts agreed when interest rates were near zero.
Shadow banks need ‘increased resilience’ to avoid financial stability concerns, Bank of England warns Shadow banks The Bank of England’s Lee Foulger warned there needed to be “increased levels of resilience” in the shadow bank space to avoid risks to financial stability. With increased regulation of the traditional financial sector since the financial crisis, Foulger, a director, financial stability, strategy and risk. said “it is no surprise that over that time [...]
LDI funds withstanding pressure in gilt market as BoE turns attention to shadow banks LDI funds Liability driven investment funds (LDIs) have maintained “high levels of resilience” despite recent volatility in the gilt market, the Bank of England’s Jonathan Hall said today. Hall, an external member of the Bank’s Financial Policy Committee (FPC) said that recent moves in gilt yields had been “significant” as investors reassessed the likelihood of further rate [...]
Bank of England launches first ‘system-wide’ stress test to shed light on shadow banks June 19, 2023 The Bank of England launched its first system-wide stress test today of the financial sector as it attempts to shed light on the shadow banking sector. Through the tests, the Bank of England hopes to better understand how, during a period of market stress, the behaviour of shadow banks could amplify financial shocks. Shadow banks [...]
Regulators demand LDI strategy ‘buffers’ to shore up funds following mini budget market meltdown April 24, 2023 Regulators are pressing managers of debt-fuelled liability driven investment (LDI) strategies to boost their access to quick cash and review the make up of their clients after the market was plunged into crisis by Liz Truss’s disastrous mini-budget last year.