Financial Risks and the Pension Protection Fund: Can it Survive Them?

This paper discusses the financial risks faced by the UK Pension Protection Fund (PPF) and what, if anything, it can do about them. It draws lessons from the regulatory regimes under which other financial institutions, such as banks and insurance companies, operate and asks why pension funds are treated differently. It also reviews the experience with other government-sponsored insurance schemes, such as the US Pension Benefit Guaranty Corporation, upon which the PPF is modelled. We conclude that the PPF will live under the permanent risk of insolvency as a consequence of the moral hazard, adverse selection, and, especially, systemic risks that it faces.

Balanced flux formulations for multidimensional Evans function computations for viscous shocks

The Evans function is a powerful tool for the stability analysis of viscous shock profiles; zeros of this function carry stability information. In the one-dimensional case, it is typical to compute the Evans function using Goodman's integrated coordinates [G1]; this device facilitates the search for zeros of the Evans function by winding number arguments. Although integrated coordinates are not available in the multidimensional case, we show here that there is a choice of coordinates which gives similar advantages