FN: Banks and pension funds struggle for common ground on sell-offs

18 March 2013

This article details the controversy between banks and pension funds that are struggling to find common ground.

The Basel Committee on Banking Supervision’s tougher capital constraints on banks mean they must increase the amount and quality of assets they hold and keep more capital in reserve as a cushion. Some banks, such as UBS, Deutsche Bank and Credit Suisse, have already started cutting their balance sheets. UBS has cut its multibillion non-core real estate portfolio by about $3.3 billion over the past year. Meanwhile, pension funds are struggling to meet their liabilities. Central banks, via aggressive monetary easing policies, have kept yields low on pension fund staples such as sovereign and corporate debt. Some investment banks, which are unable to afford to commit to new infrastructure deals themselves, are offering their services to pension funds.

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