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"I do not like the term (LDI) and never did, it has been hijacked by consultants and has morphed into what we are seeing now," said John Ralfe, who in 2001 led the 2.3 billion pound Boots Pension Fund's shift into bonds. "The fund didn't load up on debt... Pension schemes were doing disguised borrowing, it's absolutely toxic... There was much greater risk in the financial system than anyone - including me - would have thought."

"In the wake of the margin crunch for UK pension funds, dealers have seen a surge in demand for committed collateral transformation facilities that allow the funds to swap less-liquid assets for eligible collateral to meet their calls."