For example, life insurers and pension funds may face higher risks of interest rate changes arising from their liabilities, as bond yields drop. They could respond by investing more heavily in longer-dated bonds, thereby aggravating the decline in yields and affecting market-based indicators of inflation expectations.
BIS Review 52/2010  1  obtained suggested that the capital and liquidity of the firm were seriously deficient, a view that we conveyed to the company and that I believe was shared by the SEC and the Treasury Department.