MPs told 'illegal' LDIs fanned gilt crisis

At a hearing in front of the Work and Pensions Select Committee, experts criticised LDIs for being highly leveraged, causing "carnage" for some pension schemes, and blamed regulators for not acting previously. Bond market veteran Dr Con Keating, now head of research at the specialist insurer Brighton Rock Group, said borrowing by pension funds was not permitted, but that regulators had not stepped in over LDI. Keating told MPs: "There's a question of legality there." Pension funds were relying on a "mistransposition" to use LDIs, he said, from when an EU directive on the use of der...