Pubblicato in: Banche Centrali, Devoluzione socialismo, Fisco e Tasse, Regno Unito, Senza categoria

Truss. Un crollo da un trilione di dollari che ha gettato il Regno Unito nella crisi.

Giuseppe Sandro Mela.

2022-10-15.

2022-09-04__ Svezia 001

Liz Truss e la sua amministrazione di immigrati, senza nemmeno un inglese, ha fatto e sta facendo più danni di una bomba atomica.

Ma la banca centrale inglese non è onnipotente.

Il crollo dei fondi pensioni lascia un gran numero di persone senza capitale e senza pensione.

Ma il prossimo anno gli Elettori sembrerebbero essere bene intenzionati a votare in modo plebiscitario i laburisti.

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I fondi pensione sono progettati per essere noiosi. Il loro unico scopo – incassare liquidità sufficiente per effettuare i pagamenti ai pensionati – favorisce la freddezza rispetto ai temerari che corrono il pericolo. Ma quando i mercati del Regno Unito sono andati in tilt la scorsa settimana, un intero gruppo di gestori di fondi pensione britannici si è trovato al centro di una crisi che ha spinto la Banca d’Inghilterra a intervenire per ripristinare la stabilità e scongiurare un più ampio crollo finanziario.

In seguito all’annuncio del ministro delle Finanze Kwasi Kwarteng, venerdì 23 settembre, di un piano per aumentare i prestiti per pagare i tagli alle tasse, gli acquirenti hanno scaricato la sterlina e i titoli di Stato del Regno Unito, mandando i rendimenti di parte del debito alle stelle con la velocità più alta mai registrata. Con il crollo del valore dei titoli di Stato, ai fondi è stato chiesto di fornire miliardi di chili in garanzie. In una corsa al denaro, i gestori dei fondi sono stati costretti a promuovere tutto ciò che potevano – insieme, in alcuni casi, ad altri titoli di Stato. Questo ha fatto salire ulteriormente i rendimenti, scatenando un’altra ondata di richieste di garanzie.

La Banca d’Inghilterra è entrata in modalità crisi. Dopo aver lavorato la sera di martedì 27 settembre, il giorno successivo è intervenuta sul mercato con l’impegno di acquistare fino a 65 miliardi di sterline (73 miliardi di dollari) in obbligazioni, se necessario. Questo ha fermato l’emorragia e ha scongiurato quello che l’istituto finanziario centrale ha poi dichiarato ai legislatori essere il suo peggior timore: una spirale auto-rinforzante e una diffusa instabilità finanziaria. Al momento i fondi pensione sono in corsa per raccogliere denaro per riempire le loro casse. Tuttavia, ci si chiede se siano in grado di ritrovare il loro equilibrio prima della scadenza del prestito obbligazionario d’emergenza della Banca d’Inghilterra, prevista per il 14 ottobre. E per una più ampia gamma di acquirenti, il quasi fallimento è un campanello d’allarme.

L’LDI si basa su una semplice premessa: le pensioni devono disporre di liquidità sufficiente per pagare quanto dovuto ai pensionati anche in futuro. Per pianificare i pagamenti tra 30 o 50 anni, acquistano obbligazioni a lunga scadenza, mentre comprano derivati per coprire queste scommesse. Nel frattempo, devono fornire garanzie. Se i rendimenti obbligazionari salgono bruscamente, viene richiesto loro di mettere a disposizione molto più collaterale in quella che viene spesso definita una richiesta di margine. Questo settore oscuro del mercato è cresciuto rapidamente negli ultimi anni, raggiungendo una valutazione di oltre un trilione di sterline (1.1 trilioni di dollari), secondo la Banca d’Inghilterra.

Mentre le banche centrali aumentano i tassi di interesse al ritmo più rapido degli ultimi decenni, gli acquirenti sono nervosi per le implicazioni sui loro portafogli e sul sistema economico. Hanno in mano più denaro, il che rende più difficile l’esecuzione delle operazioni e può esacerbare i colpi di fortuna.

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«How meltdown in a $1 trillion market brought the UK to the brink of a financial crisis. Pension funds are designed to be boring. Their singular purpose — incomes sufficient cash to make payouts to retirees — favors cool heads over brash danger takers. But as markets in the United Kingdom went haywire last week, a whole bunch of British pension fund managers discovered themselves at the middle of a crisis that pressured the Bank of England to step in to restore stability and avert a broader financial meltdown.»

«Following finance minister Kwasi Kwarteng’s announcement on Friday, Sept. 23 of plans to ramp up borrowing to pay for tax cuts, buyers dumped the pound and UK authorities bonds, sending yields on some of that debt soaring at the quickest charge on file. As the worth of authorities bonds crashed, the funds had been requested to pony up billions of kilos in collateral. In a scramble for money, funding managers had been pressured to promote no matter they may — together with, in some circumstances, extra authorities bonds. That despatched yields even larger, sparking one other wave of collateral calls»

«The Bank of England went into crisis mode. After working by the evening of Tuesday, Sept. 27, it stepped into the market the subsequent day with a pledge to purchase up to £65 billion ($73 billion) in bonds if wanted. That stopped the bleeding and averted what the central financial institution later advised lawmakers was its worst concern: a self-reinforcing spiral and widespread financial instability. Pension funds at the moment are racing to elevate cash to refill their coffers. Yet there are questions on whether or not they can discover their footing earlier than the Bank of England’s emergency bond-buying is due to finish on Oct. 14. And for a wider vary of buyers, the near-miss is a wake-up name.»

«LDI is constructed on a simple premise: Pensions want sufficient cash to pay what they owe retirees nicely into the future. To plan for payouts in 30 or 50 years, they purchase long-dated bonds, whereas buying derivatives to hedge these bets. In the course of, they’ve to put up collateral. If bond yields rise sharply, they’re requested to put up much more collateral in what’s often known as a margin call. This obscure nook of the market has grown quickly in latest years, reaching a valuation of extra £1 trillion ($1.1 trillion), in accordance to the Bank of England.»

«As central banks jack up rates of interest at the fastest clip in decades, buyers are nervous about the implications for his or her portfolios and for the economic system. They’re holding more money, which makes it more durable to execute trades and may exacerbate jarring worth strikes.»

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How meltdown in a $1 trillion market brought the UK to the brink of a financial crisis

Pension funds are designed to be boring. Their singular purpose — incomes sufficient cash to make payouts to retirees — favors cool heads over brash danger takers.

But as markets in the United Kingdom went haywire last week, a whole bunch of British pension fund managers discovered themselves at the middle of a crisis that pressured the Bank of England to step in to restore stability and avert a broader financial meltdown.

All it took was one massive shock. Following finance minister Kwasi Kwarteng’s announcement on Friday, Sept. 23 of plans to ramp up borrowing to pay for tax cuts, buyers dumped the pound and UK authorities bonds, sending yields on some of that debt soaring at the quickest charge on file.

The scale of the tumult put monumental stress on many pension funds by upending an investing technique that includes the use of derivatives to hedge their bets.

As the worth of authorities bonds crashed, the funds had been requested to pony up billions of kilos in collateral. In a scramble for money, funding managers had been pressured to promote no matter they may — together with, in some circumstances, extra authorities bonds. That despatched yields even larger, sparking one other wave of collateral calls.

“It started to feed itself,” mentioned Ben Gold, head of funding at XPS Pensions Group, a UK pensions consultancy. “Everyone was looking to sell and there was no buyer.”

The Bank of England went into crisis mode. After working by the evening of Tuesday, Sept. 27, it stepped into the market the subsequent day with a pledge to purchase up to £65 billion ($73 billion) in bonds if wanted. That stopped the bleeding and averted what the central financial institution later advised lawmakers was its worst concern: a “self-reinforcing spiral” and “widespread financial instability.”

In a letter to the head of the UK Parliament’s Treasury Committee this week, the Bank of England mentioned that if it hadn’t interceded, a quantity of funds would have defaulted, amplifying the pressure on the financial system. It mentioned its intervention was important to “restore core market functioning.”

Pension funds at the moment are racing to elevate cash to refill their coffers. Yet there are questions on whether or not they can discover their footing earlier than the Bank of England’s emergency bond-buying is due to finish on Oct. 14. And for a wider vary of buyers, the near-miss is a wake-up name.

For the first time in many years, rates of interest are rising shortly round the world. In that local weather, markets are inclined to accidents.

“What the previous two weeks have told you is there can be a lot more volatility in markets,” mentioned Barry Kenneth, chief funding officer at the Pension Protection Fund, which manages pensions for workers of UK firms that develop into bancrupt. “It’s easy to invest when everything’s going up. It’s a lot more difficult to invest when you’re trying to catch a falling knife, or you’ve got to readjust to a new environment.”

The first indicators of bother appeared amongst fund managers who give attention to so-called “liability-driven investment,” or LDI, for pensions. Gold mentioned he began to obtain messages from apprehensive purchasers over the weekend of Sept. 24-25.

LDI is constructed on a simple premise: Pensions want sufficient cash to pay what they owe retirees nicely into the future. To plan for payouts in 30 or 50 years, they purchase long-dated bonds, whereas buying derivatives to hedge these bets. In the course of, they’ve to put up collateral. If bond yields rise sharply, they’re requested to put up much more collateral in what’s often known as a “margin call.” This obscure nook of the market has grown quickly in latest years, reaching a valuation of extra £1 trillion ($1.1 trillion), in accordance to the Bank of England.

When bond yields rise slowly over time, it’s not a drawback for pensions deploying LDI methods, and really helps their funds. But if bond yields shoot up in a short time, it’s a recipe for bother. According to the Bank of England, the transfer in bond yields earlier than it intervened was “unprecedented.” The four-day transfer in 30-year UK authorities bonds was greater than twice what was seen throughout the highest-stress interval of the pandemic.

“The sharpness and the viciousness of the move is what really caught people out,” Kenneth mentioned.

The margin calls got here in — and saved coming. The Pension Protection Fund mentioned it confronted a £1.6 billion name for money. It was ready to pay with out dumping belongings, however others had been caught off guard, and had been pressured into a fireplace sale of authorities bonds, company debt and shares to elevate cash. Gold estimated that a minimum of half of the 400 pension applications that XPS advises confronted collateral calls, and that throughout the business, funds at the moment are trying to fill a gap of between £100 billion and £150 billion.

“When you push such large moves through the financial system, it makes sense that something would break,” mentioned Rohan Khanna, a strategist at UBS.

When market dysfunction sparks a chain response, it’s not simply scary for buyers. The Bank of England made clear in its letter that the bond market rout “may have led to an excessive and sudden tightening of financing conditions for the real economy” as borrowing prices skyrocketed. For many companies and mortgage holders, they have already got.

So far, the Bank of England has solely purchased £3.8 billion in bonds, far lower than it may have bought. Still, the effort has despatched a robust sign. Yields on longer-term bonds have dropped sharply, giving pension funds time to recoup — although they’ve just lately began to rise once more.

“What the Bank of England has done is bought time for some of my peers out there,” Kenneth mentioned.

Still, Kenneth is anxious that if the program ends subsequent week as scheduled, the activity received’t be full given the complexity of many pension funds. Daniela Russell, head of UK charges technique at HSBC, warned in a latest be aware to purchasers that there’s a danger of a “cliff-edge,” particularly since the Bank of England is transferring forward with earlier plans to begin promoting bonds it purchased throughout the pandemic at the finish of the month.

“It might be hoped that the precedent of BoE intervention continues to provide a backstop beyond this date, but this may not be sufficient to prevent a renewed vigorous sell-off in long-dated gilts,” she wrote.

As central banks jack up rates of interest at the fastest clip in decades, buyers are nervous about the implications for his or her portfolios and for the economic system. They’re holding more money, which makes it more durable to execute trades and may exacerbate jarring worth strikes.

That makes a shock occasion extra possible to trigger large disruption, and the specter of the subsequent shocker looms. Will it’s a tough batch of financial knowledge? Trouble at a global bank? Another political misstep in the United Kingdom?

Gold mentioned the pension business as a complete is best ready now, although he concedes it could be “naive” to suppose there couldn’t be one other bout of instability.

“You would need to see yields rise more quickly than we saw this time,” he mentioned, noting the bigger buffers funds at the moment are amassing. “It would require something of absolutely historic proportions for that not to be enough, but you never know.”

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