Bank of England to run stress tests of non-banks for first time after UK pension crisis

The Bank of England said on Tuesday that it would launch stress tests of investment funds and other financial institutions outside the banking sector next year. This move comes after the recent near-collapse of the UK pension sector. 

The central bank undertook large-scale purchases of British government bonds in September to calm markets after Liz Truss, Britain’s former prime minister, launched her economic plan. The emergency programme included 9.3 billion pounds ($23.75 billion) of spending. 

The U.K. pension funds ensured long-term payouts, backed by liability-driven investment (LDI) funds. Shocks in the value of government bonds put strain on investment funds. 

The BoE's Financial Policy Committee, which protects the UK financial system, noted Tuesday that this case showed the need for stress tests of non-banks.