OECD calls for vigilance on ‘search for yield’, lenience on solvency

first_imgInternational regulators must monitor pension funds in their ‘search for yield’ as they try to secure benefit promises by investing in increasingly risky assets, the Organisation for Economic Co-operation and Development (OECD) has warned.The Paris-based think tank published a paper looking at whether pension funds and insurance companies would be able to maintain promises made in higher-interest-rate times, given the current low-yield environment.In a stark warning, it said regulators should be more lenient on forcing solvency requirements in times of market stress while ensuring pension funds were not taking excessive investment risks that could lead to insolvency.It said there was a serious concern for the financial longevity of pension funds should they become embroiled in an “excessive search for yield” to cover promises made when interest rates were higher. In its Business and Finance Outlook 2015 report, the OECD said pension funds, by increasing the risk profiles, could be “seriously compromising their solvency situation” if a financial shock such as a liquidity freeze took place.Its data showed that, while the overall investment in alternatives had increased, this could be down to overall larger portfolios, with the exception of the UK.The OECD’s UK data showed pension funds clearly engaging in the search for yield, with an upward trend in private equity and structured products.Given the prolonged effect of low interest rates on pension funds, the OECD highlighted duration-matching assets, renegotiating promises, increasing contributions and easing regulation as solutions to alleviate concerns.It echoed calls for regulatory requirements to fund solvency shortfalls to be counter-cyclical, meaning additional funding should be made when pension fund liabilities are not being exacerbated by falling rates.The OECD’s call for leniency in solvency, and focus on investment risk, goes against the rhetoric seen from Europe’s government and regulators.Solvency requirements were discussed under the previous European Commission, while work on a risk-focused solvency framework – which may require additional funding in riskier times – is being worked on by the European Insurance and Occupational Pensions Authority (EIOPA).The OECD said: “The outlook is troubling for pension funds, as solvency positions will deteriorate unless they actively adopt risk-management strategies.“However, the lack of good quality, very long-term financial assets in sufficient quantities poses serious problems to these risk-management strategies.”It said pension funds should look to close the duration gap between assets and liabilities, while policymakers should avoid excessive pressure on pension funds to correct solvency in times of weak markets.“The regulatory framework and policymakers have an important role to play in [ensuring pension funds do not take excessive risk] and need to remain vigilant to prevent excessive ‘search for yield’,” it added.However, Charles Cowling, director at UK consultancy JLT, sounded a note of caution on the OECD’s proposals.He said: “If [regulators] responded to concerns from the OECD on the poor level of funding of pension schemes and increased pressure on employers to take less risk and fund their pension schemes better, this could force some of the weaker employers into bankruptcy and put downward pressure on equity prices and make matters worse – as deficits widen as a result.”last_img read more


Rooney upbeat ahead Derby debut rules out retirement

first_img Promoted ContentBest Car Manufacturers In The WorldWhat Is A Black Hole In Simple Terms?Deepika Padukone’s Most Memorable Looks10 Risky Jobs Some Women DoBest & Worst Celebrity Endorsed Games Ever MadeYou’ve Only Seen Such Colorful Hairdos In A Handful Of AnimeCouples Who Celebrated Their Union In A Unique, Unforgettable Way18 Beautiful Cities That Are Tourist Magnets7 Non-Obvious Things That Damage Your Phone5 Of The World’s Most Unique Theme Parks5 Of The World’s Most Unique Theme Parks8 Things To Expect If An Asteroid Hits Our Planet Wayne Rooney has set his sights on playing as long as he can as he prepares to make his debut for Championship side Derby County. The former England striker signed an 18-month deal with the Rams and is eligible to play for them in their clash against Barnsley at Pride Park on January 2. Despite the agreement involving coaching duties at the club, Rooney insisted he would keep going as long as he physically can. Asked whether he may stay beyond his initial deal, Rooney told Sky Sports: ‘That depends on different circumstances. ‘I have an 18-month contract. It depends on how my body is after that and how Derby feel I have done. ‘I feel good. I’ve been lucky in my career that I haven’t had major muscle injuries that can affect you later on. I haven’t missed a training session in two years. I will play for as long as my body allows me.Advertisement FacebookTwitterWhatsAppEmail分享 Loading… ‘I signed in the summer but I’ve been in for a few weeks now training and I’m ready to play,’ he added. ‘I’m looking forward to it.’ Former United ace and Derby county new sign ready to meet county fans The England’s record goalscorer has not played a match since leaving DC United on October 19, but claimed he felt in great shape. He added: ‘I feel my body is still ready to play, I feel good. As long as I feel I can benefit the team, then I’ll play. I feel I can add quality to the team, experience. I feel there is plenty I can offer. ‘It’s a league that I’ve always watched and it’s a bit different to the Premier League – there are a lot more games first of all. ‘Quality-wise it’s probably not as good as the Premier League but it’s a good league. You have to battle to get results and I have no problem with that.Rooney left MLS club DC United in October after 52 games, 25 goals and two years in America.last_img read more


Batesville Middle School Wrestling vs. Madison

first_imgThe BHS Wrestling Team traveled to Madison to face off for their first meet of the year.  The Bulldogs wrestled tough but fell short losing 48-27.Varsity match winners include: Hunter Fetters, Michael Deal, John Moody, Ben Westerfeld, and Jarett Hooten.Submitted by Batesville Coach Chris Deal.last_img


Every school in India needs to have a playground, says Bahadur Singh

first_imgNEW DELHI: Outgoing National Chief Athletics coach Bahadur Singh has appealed to Sports Minister Kiren Rijiju and administrators to ensure that every school in the country has space for children to play. The 74-year-old said that India has the potential to become a powerhouse in sports if it ensures that the country’s children have ample space to play sports.”If there is a playground in schools everywhere then there will be lots of PT Usha and Hima Das,” said Singh in a virtual farewell arranged for him by the Athletics Federation of India (AFI). Rijiju was present in the video conference alongwith a number of big names of Indian sports administration, including former sportspersons like PT Usha and Anju Bobby George. “But unfortunately, our schools have no place to play. India has a lot of talent, no doubt. India can be a world power in athletics but for that we have to make space for kids to play in schools. “In schools in China, there is three hours continuous physical activity. They also give food in the school. That’s the importance that country and many others are giving to their children. But sir, we are not giving our children importance. In lakhs of schools in our country, there are no playing fields.” Singh also said that the country needs more indoor facilities which might help athletes to avoid travelling overseas for training when conditions in India are not suitable. “We spend a lot of money in sending our athletes overseas when the climate at home does not permit training. India badly needs an indoor facility,” he said. Singh said that the rise of India in sports this far is a credit to the “teamwork” of various stakeholders in the field and not his achievement alone. “This work has been done by all the coaches, athletes, AFI, SAI, the centre heads, ministry — it is a teamwork they have done but everything comes on my name which is surprising,” he said with a smile. IANS Also watch: Get Set Global: How are People in The UK Facing Financial Crisis & Morelast_img read more