The WSJ Reports:
WASHINGTON—Former Federal Reserve Chairman Alan Greenspan urged U.S. policy makers Wednesday to place significantly higher capital and collateral requirements on the financial-services industry, warning of the likelihood of future financial crises if steps aren't taken to address "too big to fail" firms and the inability of the private market and regulators to predict major risks.
This is the same Alan Greenspan that consistently put forward positions that did exactly the opposite. Let's go back and revisit history:
Sweep accounts made a mockery of reserves in the banking system - an "innovation" that Alan Greenspan put in place.
The merger of Citi and Travelers, an act that was black-letter unlawful at the time it was entered into, was passed over by The Fed (even though they had authority to block it) and Greenspan then supported Gramm-Leach-Bliley that retroactively made the merger lawful.
[Related -Bank Stocks: The Misbegottenness of the Volcker Rule Truly Knows No Bounds]
There's more, but that's enough - in short, Greenspan is a blatant, black-letter liar. He personally put forward much of the so-called "innovations" that not only allowed new products into the market but he personally destroyed the capital and collateral requirements that formerly protected banks from ruinous losses as a consequence of bad lending decisions.
[Related -JPMorgan Chase & Co. (JPM): Capital Concerns Should Ease In 2014]
Now, having witnessed the acts of his own hand blowing banks to little bits, he wants to go back and revise history, ignoring his own role in setting forward the conditions that made the mess occur!
Puppies often go hide in shame after taking a dump on your carpet, but it takes a senile old coot like Greenspan to stand there and intentionally ignore the smelly edifice that he emitted and which sits directly under his nose.
Commission member Brooksley Born, who chaired the U.S. Commodity Futures Trading Commission during the Clinton administration, was more blunt.
"The Fed utterly failed to prevent the financial crisis," she said. "Failed to prevent the housing bubble, failed to prevent the predatory lending scandal."
No kidding. Ms.