Tuesday, May 17, 2011

Death Derivatives Emerge From Pension Risks of Living Too Long - Bloomberg

Death Derivatives Emerge From Pension Risks of Living Too Long - Bloomberg

I'd love to hear people thoughts on this... very interesting and could have all kinds of unintended consequences. 

"Pension funds sitting on more than $23 trillion of assets are buying insurance against the risk their members live longer than expected. Banks are looking to earn fees from packaging that risk into bonds and other securities to sell to investors. The hard part: Finding buyers willing to take the other side of bets that may take 20 years or more to play out."

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