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ALEX BRUMMER: Chiefs who swerve blame over the LDI catastrophe

Market turmoil: Responsibility for the LDI crisis, which put the pensions of 10m people at risk and required a £20bn bailout from the Bank of England, has yet to be determined

The turmoil in the UK government bond market and its impact on the pensions and mortgages of millions of ordinary citizens has been the most disturbing financial event of our time.

No other meltdown, ranging from Britain’s ejection from the exchange rate mechanism in 1992 to the crisis of 2007-09, produced such an instant reaction.

Chancellor Kwasi Kwarteng and Prime Minister Liz Truss were ruthlessly removed from office.

Market turmoil: Responsibility for the LDI crisis, which put the pensions of 10m people at risk and required a £20bn bailout from the Bank of England, has yet to be determined

Market turmoil: Responsibility for the LDI crisis, which put the pensions of 10m people at risk and required a £20bn bailout from the Bank of England, has yet to be determined

The blame for the market shock lies entirely with Kwarteng-Truss and their mad dash for growth.

Responsibility for the turmoil, which put the pensions of 10million people at risk and required a £20billion bailout from the Bank of England, has yet to be determined.

Ongoing parliamentary inquiries show the financial establishment in redistribution mode.

Bank Governor Andrew Bailey has argued that the best way to avoid another meltdown in the market for liability-driven investments (LDIs) – complex derivatives built on golden stocks – is to change the rules for administrators of smaller funds not equipped to deal with the crisis.

Wait a moment. The Bank itself warned that this was an accident waiting to happen as early as 2018, stress-tested the market for a full jump in government rates and suggested that the securities regulator pensions, its own prudential branch and international law enforcement are getting involved. Nothing happened.

As for Bailey, he received no early warning from Downing Street of the coming release and was therefore presumably unable to brake the locomotive and prepare.

Members of the Monetary Policy Committee (MPC) do not live in a vacuum and could only be aware of the noises from Downing Street, including the decision not to have the mini-budget audited by the Office for Budget Responsibility.

What was the point of the Treasury sending a senior civil servant, Clare Lombardelli, to the MPC session a few days before the budget if she was unable to provide a budget overview?

The story on the other side of the fence was also unconvincing.

Legal & General bosses John Kingman and Nigel Wilson turned fire on the dead political leaders.

This conveniently put aside their own guilt in using IDLs to manage retirement commitments. Other big insurers like Aviva have avoided such high-risk strategies.

Former Bank of England Deputy Governor Paul Tucker is right. He suggested that the stress tests for a full percent move in rates were inadequate and should have been a full three points.

The impact of complacent regulation is still being felt. Lloyds Bank boss Charlie Nunn argued at an FT banking summit that the consequences of the mini budget linger, in the form of a fall in the share price.

The contagion of LDIs, which are part of the shadow banking universe, is not entirely contained.

Havoc branch

HSBC has enough problems to deal with in Hong Kong-China without alienating UK customers.

It can’t help but cut costs by cutting a quarter of its UK branches, cutting a network that once covered every corner of the country, with 1,200 outlets, to just 327.

Yes, most customers go online for routine transactions. But there are whole categories of customers, including an older population, who don’t have access to digital.

Many small retail businesses rely on the local branch to get coins and pay cash.

They do not need a waste of fuel and a long trip to distant branches.

In turbulent days like this fall, there’s no substitute for meeting face-to-face to secure a mortgage or for a business looking for a larger line of credit.

Post offices, overloaded with customers making returns online, cannot replace them.

If nationwide, a mutual, can seriously reorient branches, HSBC should be able to call upon similar creative thinking.

self-harm

Mulberry has long struggled to establish itself as a world-class luxury brand.

Nevertheless, Jeremy Hunt must listen to chief executive Thierry Andretta who says the number of customers has fallen since the Chancellor reimposed VAT on foreign buyers.

Brexit was supposed to give the UK the freedom to set its own competitive fiscal rules.

Instead, the government shot itself in the foot, as well as the high-end tourist hospitality industry.

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