PensionsEurope answered on 18 June 2024 to FSB’s consultation report on liquidity preparedness for margin and collateral calls to highlight the differences between UK and EU pension fund systems and also to stress the importance of having central banks supporting repo markets during stress periods. We also indicated that pension funds use derivatives to manage financial solvency risk due to long-dated and interest rate-linked liabilities. Proportionality in applying recommendations is key, given the diverse derivate exposure levels among NBFIs, to avoid a major impact on investment returns and pensions.
