Tuesday, September 8, 2009
The Real Culprit of our Demise: Greenspan Says Capital Requirements Must Be Raised
*A day late and a TRILLION dollars none too short. Can you believe this guy? He's like the jerk who says I'm sorry, but....It's ALWAYS someone else's fault. This is what has always ailed America, no personal responsibility. And who picked him? A pubby. And who kept him a second time? A jackass. Sound familiar? Need I say more?
Former Federal Reserve Chairman Alan Greenspan said banks should be forced to hold more capital on their balance sheets, reinforcing a weekend push by finance chiefs from the Group of 20 nations.
“Capital requirements even during non-crisis periods have to have a larger buffer,” the 83-year-old former policy maker said today via teleconference to the Antique India Markets Conference in Mumbai. “We do need significant changes.”
Noting the world economy was emerging from the financial crisis “fairly quickly,” Greenspan made his call for tighter capital requirements two days after a G-20 meeting in London proposed having banks increase the quantity and quality of assets they keep in reserve for when economies stumble. The drive to revamp regulation comes after excessive risk-taking by the world’s banks led to $1.61 trillion in losses and writedowns, taxpayer-funded bailouts and a global recession.
“Financial intermediaries allowed institutions to go into default by taking this kind of risk,” Greenspan said. “There’s no substitute for capital. Don’t think the crisis could have been prevented unless we can change human nature.”
Once regarded by some observers as the greatest central banker, Greenspan has seen his legacy criticized since the U.S. subprime-mortgage market collapsed in 2007. Having run the Fed from 1987 to 2006, he said last in October that a “flaw” in the ideology of free-market risk management he had espoused contributed to the “once-in-a-century” credit crisis.