BoE policy-maker flags perils of ‘dynamic leverage’

Bank of England
Daniel Hinge

A failure to understand “dynamic leverage” played a key role in the UK’s liability-driven investment (LDI) crisis in 2022, and could be a problem more widely, a Bank of England policy-maker said today (June 20).

Jonathan Hall, who sits on the BoE’s financial policy committee, said firms rebalancing their portfolios to deal with fluctuations in leverage could be imposing hidden costs on the financial system.

In the LDI crisis, as well as the 2020 ‘dash for cash’ and the commodities shock after

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account