UK pension funds’ patience and liquidity in the age of market-based finance

IF 3.8 2区经济学 Q1 ECONOMICS

New Political Economy Pub Date : 2023-03-02 DOI:10.1080/13563467.2023.2184469

Bruno Bonizzi, J. Churchill, Annina Kaltenbrunner

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引用次数: 0

Abstract

ABSTRACT Pension funds have often failed to meet expectations in terms of providing ‘patient capital’. Explanations for this lapse have ranged over regulatory and ideational factors. We argue that a new ‘impatient’ phenomenon is emerging that requires further explanation: pension funds are becoming more mindful of their liquidity and collateral management, and engage in pro-cyclical investment behaviour. We show how UK pension funds have adapted their investment strategies, investing significantly in collective funds, including in foreign and in ‘alternative assets’, and setting aside protection assets as collateral for their derivatives and repo transactions. This behaviour has increased pension funds’ exposure to and participation in liquidity spirals, forcing them to dispose of assets during crises and contributing to the overall pro-cyclicality of the contemporary market-based financial system. This was most recently highlighted by the instability of UK government bond markets in September 2022. Drawing from Minsky and the emerging literature on Critical Macro-Finance, we argue that this new pension fund behaviour is in response to structural changes in the financial markets in which they operate.

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英国养老基金在市场金融时代的耐心和流动性

养老基金在提供“耐心资本”方面经常不能达到预期。对这一失误的解释包括监管和观念方面的因素。我们认为，一种新的“不耐烦”现象正在出现，需要进一步解释:养老基金正变得更加注意其流动性和抵押品管理，并参与顺周期投资行为。我们展示了英国养老基金如何调整其投资策略，大量投资于集体基金，包括外国和“另类资产”，并留出保护资产作为其衍生品和回购交易的抵押品。这种行为增加了养老基金对流动性螺旋式上升的敞口和参与，迫使它们在危机期间处置资产，并促进了当代以市场为基础的金融体系的整体顺周期性。这一点最近在2022年9月英国政府债券市场的不稳定中得到了突出体现。根据明斯基和新兴的关键宏观金融文献，我们认为，这种新的养老基金行为是对其所在金融市场结构性变化的回应。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

New Political Economy Multiple-

CiteScore

10.10

自引率

9.50%

发文量

期刊介绍： New Political Economy aims to create a forum for work which combines the breadth of vision which characterised the classical political economy of the nineteenth century with the analytical advances of twentieth century social science. It seeks to represent the terrain of political economy scholarship across different disciplines, emphasising original and innovative work which explores new approaches and methodologies, and addresses core debates and issues of historical and contemporary relevance.