Why Did UK Pensions Almost Collapse

Liability-Driven Investment (LDI) strategies were intended to be a safe, boring way for pension funds to manage risk. Instead, they became the catalyst for a systemic financial meltdown in the UK. This video explores how pension funds used leverage and derivatives to hedge their future obligations. We analyze the 2022 Gilt market crash and show how a sudden spike in collateral requirements forced a fire sale of assets, nearly collapsing the UK financial system in the process. See how institutional hedging can unintentionally create massive systemic risks. If you enjoy learning about the mechanics of financial crises, this one's for you.

Added 4 Aug 2026