"Former Federal Reserve Chairman Alan Greenspan told CNBC that he had little to do with the housing bubble or credit crisis despite criticism that the Fed kept interest rates too low under his watch.
RE: Greenspan on exotic mortgage alternatives, 2004 TheWolf NEW 4/8/2008 5:23:47 PM
February 23, 2004, Chairman Greenspan spoke to the Credit Union National Association 2004:
"Fixed-rate mortgages seem unduly expensive to households in other countries. One possible reason is that these mortgages effectively charge homeowners high fees for protection against rising interest rates and for the right to refinance.
American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."
RE: Greenspan on exotic mortgage alternatives, 2004 taichi NEW 4/8/2008 5:33:37 PM
Alan Greenspan, praising subprime lending in a speech on April 8, 2005:
"With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. . . .
As we reflect on the evolution of consumer credit in the United States, we must conclude that innovation and structural change in the financial services industry have been critical in providing expanded access to credit for the vast majority of consumers, including those of limited means. . . . This fact underscores the importance of our roles as policymakers, researchers, bankers and consumer advocates in fostering constructive innovation that is both responsive to market demand and beneficial to consumers."
RE: Greenspan on Glass-Steagall 1999 TheWolf NEW 4/8/2008 5:34:53 PM
Testifying before the House Committee on Banking and Financial Services, February 11, 1999, Greenspan declared,
“we support, as we have for many years, major revisions, such as those included in H.R. 10, to the Glass-Steagall Act and the Bank Holding Company Act to remove the legislative barriers against the integration of banking, insurance, and securities activities. There is virtual unanimity among all concerned--private and public alike--that these barriers should be removed. The technologically driven proliferation of new financial products that enable risk unbundling have been increasingly combining the characteristics of banking, insurance, and securities products into single financial instruments.”
RE: Greenspan on exotic mortgage alternatives, 2004 TheWolf NEW 4/8/2008 5:40:57 PM
Feb 23, 2004 Greenspan gems...continued
"Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country … With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. … Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s."
RE: from his "autobiography" pencilneck NEW 4/8/2008 5:59:54 PM
page 230
"The gains were especially dramatic among Hispanics and blacks, as increasing affluence as well as government encouragement of subprime mortgage programs enabled many members of minority groups to become first-time home buyers."
I don't think history will view him as well as he views himself.
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