Sterling under stress: what the turmoil in Britain means for Irish business
The UK is still one our most important trading partners, and the knock-on effect for Ireland of continuing instability in its currency could be considerable
Last July, Toby Nangle wrote an opinion piece for the Financial Times in which he warned that the British pension fund industry was at risk of margins calls on £1.5 trillion of liabilities hedged with so-called Liability Driven Investment (LDI) trades.
The scenario described in his prescient piece became a reality last week after the British bond market fell into a so-called “doom loop” of margin calls on these LDI derivatives. The turmoil forced the ...