Liability-Driven Investments crisis shows derivatives remain a systemic risk

Published on 17 December 2022


At the end of September 2022 a number of UK companies’ pension plans reportedly came close to collapse. This was to do with a financial instrument called a Liability-Driven Investment or LDI, which is a form of derivative contract.

The explanations given for what occurred have ranged from ill-informed to denial to […]

‘Liability Driven Investment’ explained: the first bailout of the new Global Financial Crisis

Blog published on 2 November 2022

First published as an IREF online article on

‘Liability Driven Investment’ or ‘LDI’ is both a nonsense and a truism, and is now a byword for a disaster in the UK financial system.

Here is what happened. UK pension funds became convinced that they would experience a shortfall of resources to […]