Bank of EnglandView Report
A new study from the Bank of England, led by the bank's Director of Financial Stability, Andrew Haldane and compiled with the expertise of Oxford Martin School academics, examines the risk that the investment activities of UK pension funds and life insurers pose to financial stability and economic growth. Insurers’ preference for shedding risk in times of volatility may amplify swings in markets and asset prices, the study found. This cuts against their potential to act as a stabilising influence on the financial system by holding assets through the cycle. A preference for fixed-income assets can weigh against the ability of insurers and pension funds to provide the long-term investment needed for economic growth. Professor Ian Goldin, Director of the Oxford Martin School, is joint Deputy Chair of the group. It also includes Professor John Muellbauer, Deputy Director of Economic Modelling at The Institute for New Economic Thinking at the Oxford Martin School, and Professor Colin Mayer, Peter Moores Professor of Management Studies at Saïd Business School, University of Oxford.