The US is heading towards another bailout of a government-backed insurer, similar to that of the savings and loan crisis in the 1980s but this time involving the insurance scheme for occupational pensions, a prominent economist warned on Thursday.

Zvi Bodie, of Boston University who is known for pioneering work on the risks of investment in equities, made his remarks in an address to the St Louis Federal Reserve Bank, noting that the US's pension crisis was predictable.