Former Federal Reserve Chairman Alan Greenspan conceded Wednesday morning before a hearing with the Financial Crisis Inquiry Commission (FCIC) that he had made mistakes throughout his career, but denied that the Federal Reserve Board played a significant hand in the subprime mortgage crisis.
“Remember that the Federal Reserve Board is a rule making [agency], it is not an enforcement agency," said Greenspan, who served as chairman from 1987-2006. "We did not have the capacity to implement the types of enforcement that the FDIC, [Housing and Urban Development and the Department of Justice] has."
Greenspan explained that external factors played more of a role in the collapse of the housing market than the subprime mortgages themselves.
"Origination of subprime mortgages - as opposed to the rise in global demand for securitized mortgage interests - was not a significant cause of the financial crisis," said Greenspan.
Noted the 84 year old Greenspan, “I was right 70% of the time, but I was wrong 30% of the time. There are an awful lot of mistakes in 21 years.”
Greenspan declined to speculate on what he could have done differently.
"Figuring out what you should have done differently is a really futile activity because you can’t...in the real world, do it."
Greenspan Downplays Fed's Role In Subprime Mortgage Crisis
Former Federal Reserve Chairman Alan Greenspan conceded Wednesday morning before a hearing with the Financial Crisis Inquiry Commission (FCIC) that he had made mistakes throughout his career, but denied that the Federal Reserve Board played a significant hand in the subprime mortgage crisis.
“Remember that the Federal Reserve Board is a rule making [agency], it is not an enforcement agency," said Greenspan, who served as chairman from 1987-2006. "We did not have the capacity to implement the types of enforcement that the FDIC, [Housing and Urban Development and the Department of Justice] has."
Greenspan explained that external factors played more of a role in the collapse of the housing market than the subprime mortgages themselves.
"Origination of subprime mortgages - as opposed to the rise in global demand for securitized mortgage interests - was not a significant cause of the financial crisis," said Greenspan.
Noted the 84 year old Greenspan, “I was right 70% of the time, but I was wrong 30% of the time. There are an awful lot of mistakes in 21 years.”
Greenspan declined to speculate on what he could have done differently.
"Figuring out what you should have done differently is a really futile activity because you can’t...in the real world, do it."