Terrible hangover to come, says Bowie

The economy will get worse before it gets better according to Ronnie Bowie the new president of the Faculty of Actuaries.

The economy will get worse before it gets better, according to Ronnie Bowie, the new president of the Faculty of Actuaries.

He told the audience his president address on Monday at the Royal College of Physicians that today’s economic and financial markets will result in greater need for the skills and services that the profession offers.

He said: “Rarely has a presidential address been given during turbulent financial times. Across the Western world some of the so called masters of the financial universe, it turns out they had a very ordinary talent. We are in the abyss of financial chaos, and taxpayers will pay for excesses.

“The substantial government bail out means bail out by us – the government is pledging to underwrite cost billions of pounds of unwise loans. The consequence will mean the government will have less money to spend on healthcare, education, care for the elderly and other elements of the infrastructure. It could take a generation or more before it is all washed through the system. Things will get worse before they get better.”

Mr Bowie said that the public will demand that banks are run sensibly. He said: “The hangover from borrowing like crazy is going to be a long and uncertain one.

The public will no longer accept that banks can be run in pursuit of the profits the shareholders were demanding, and the want them to be run in a secure way – such as utilities – not low cost airlines. The managers at banks were responsible for the failures of their risk model. Failure of management is not the failure of government or regulation.”

Mr Bowie added that actuaries can have a valuable role to play in these turbulent times, adding that the industry needs its skills not just in pensions but other areas.

Mr Bowie took over as president from Stuart Richie.