In Reversal, Greenspan Advocates Tighter Regulation

Former Federal Reserve Chairman Alan Greenspan conceded Thursday in remarks to Congress that tighter regulation of financial firms is necessary amid the current crisis.  In recent weeks, he has received criticism for opposing regulation during his tenure at the central bank. (Bloomberg)

Testifying before the House Committee on Oversight and Government Reform with Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow, Greenspan said that financial markets are currently engulfed in a “once-in-a-century credit tsunami.”

“As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue,” Greenspan said.

He acknowledged he was “partially” wrong to oppose regulation of derivatives, opaque securities which many blame for exacerbating the crisis.

Sources:

Greenspan Concedes To `Flaw’ In His Market Ideology (Bloomberg)

Live Blog: Greenspan, Snow and Cox On The Hill (NYT)

Alan Greenspan Testimony (CNBC Video)

‘I Made a Mistake,’ Admits Greenspan (FT)