There may have been a hiatus in the market for liquidity swaps this year – deals in which a bank borrows gilts from a pension fund or insurance firm – but fund managers and investment consultants are preparing for their return.

This kind of deal has been around for a while, often with insurance companies or some of the big continental European pension funds lending to banks. Discussions about liquidity swaps started among UK pension funds about 18 months ago, driven by consultants such as Redington and Aon Hewitt, as regulators demanded high-quality and liquid capital reserves from banks.