Pension

Central bank still sees risk among pension funds with few counterpart banks

Banks are becoming less willing to act as counterparts in deals of sales and repurchases of bonds. This entails a liquidity risk for pension funds, Denmark’s central bank points out.
Danish central bank Nationalbanken sees a risk of pension funds not having sufficient repurchase arrangements with banks. | Photo: Finn Frandsen
Danish central bank Nationalbanken sees a risk of pension funds not having sufficient repurchase arrangements with banks. | Photo: Finn Frandsen
by mikkel holmgaard winding, translated by christian radich hoffman

Danish pension funds are exposed to liquidity risks, because they, by and large, do not have sufficient amounts of so-called repo counterparties that could offer liquidity to the pension funds in times of need.

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