Perfect storm

The fall in equity prices, combined with a sharp drop in bond yields, has decimated the funding positions of pension schemes across the globe. With many companies tottering under the weight of ballooning pension deficits, could this be the spark for the next phase of the financial crisis? Duncan Wood reports

The financial crisis is like a contagious disease, with governments pressed into service as doctors. As each new bank catches the bug, the state has administered an injection of cash or pushed the patient into the arms of a healthy competitor to keep the industry on its feet and prevent the disease spreading further. Now, pension funds have come down with a bad case of creditcrunchitis - globally, their assets fell in value by $4 trillion last year, according to consulting firm Hewitt Associates