Barclays Calls For Pension Mortgage Link

Written by Editorial Team

03 June 2004

Barclays Capital has urged the government to look into forming closer links between pension funds and housing mortgage markets.

Citing the US and Denmark as examples, the head of Barclay’s European rates strategy made clear that the UK should look to these countries for a blueprint of how pension funds can buy mortgage bonds.

John Maskell at Barclays Capital said: “It would be nice if the mortgage market and the pension fund market married up.”

He added: “What the government should be doing is unifying that part of the balance sheet.”

Mr Maskell continued by pointing out that the two segments currently occupy different points on the yield curve; and he argued that “pension funds should definitely invest in these long-run infrastructure projects” as a way of dealing with long-term liabilities.

Mr Maskell made these comments as Barclays unveiled its 2004 analysis of the AAA covered bonds market. More and more, he said, pension funds are viewing this market as a leading, alpha product.