Key facts
- Chilean pension funds requested curbs on interest-rate derivatives before losses mounted.
- Losses on interest-rate positions reached approximately $7.7 billion.
- The conservative Fund E was significantly impacted by the downturn in US Treasuries.
Executives at Chile's pension funds appealed to regulators for curbs on volatile interest-rate derivatives before a downturn in US Treasuries led to billions of dollars in losses, Bloomberg News reported. Fund managers had flagged risks associated with these positions, which have since heavily impacted the system's most conservative fund, Fund E. The losses have drawn criticism from some lawmakers and raised concerns among pensioners. The AFP Association stated that pension fund performance should be assessed over the long term, not based on short-term market fluctuations.