Greenspan discusses many of the ideas he had reversed himself on regarding the financial requirement.

Note he has adopted my Partner’s Joint & Thesis Liability explanation (from BN) that states the move to Corporate structure from a Partnership radically reduced the focus on risk management.

 

In this exclusive, unedited interview, former Fed Chairman Alan Greenspan explains why bankers are so terrible at self-regulation.

Alan Greenspan Extended Interview Pt. 1

(06:51)

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In this exclusive, unedited interview, former Fed Chairman Alan Greenspan discusses the need for increased capitalization in the global financial system.

Alan Greenspan Extended Interview Pt. 2

(07:08)

 

Category: Federal Reserve, Really, really bad calls, Regulation, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Greenspan on Cap Requirements, Self Regulation”

  1. rd says:

    It would have been nice if he had figured some of this stuff out, say 15 or 20 years ago when he was in a position to do something about it. It would have saved the world a lot of pain and suffering.

    It is pretty astonishing when you realize that it takes until their 80s for many of these economists to realize that economic systems involve real human beings instead of theoretical ones.

    His To-Do list sounds more like Sheila Baer’s and Elizabeth Warren’s than Alan Greenspan’s

    Significantly increased capital requirements for banks and broker-dealers.
    Partnerships or significant regulation of broker-dealers.
    Raising capital gains taxes to be the same as ordinary income.

    The next thing you know, he will be pushing for the formation of a government agency dedicated to the protection of consumers from the financial sector and re-invigoration of the SEC.

    His invitation list for Republican cocktail parties is going to go down significantly until he re-sees the light.

  2. Internet Tourettes says:

    Every time I see or hear Greenspan, I throw up in my mouth a little bit. Go back and watch some of his congressional testimony from 2000 – 2005 and listen to his indignant responses to congressmen questioning his un-impeachable policy. He is the best example for the lifting of indemnity for government officials and holding them liable for gross negligence in the performance of their duties. “Never before have so many owed so much to one man…..”

  3. Bob is still unemployed   says:

    One or two weeks ago, this blog asked (I paraphrase) why financial news media is so bad at what it does.

    After watching this interview I think I discovered one reason: this interview could not happen in any of the financial news shows.

    Mr. Greenspan would have been constantly interrupted mid-sentence before he even finished half of his answers. Instead of Mr. Stewart’s to-the-point questions, on the financial news media the questions would have been long, rambling things designed more to make the interviewer look smart rather than to elicit a knowledgeable response from the guest.

    After watching this interview, I no longer wonder why The Daily Show viewers are consistently polled as being more informed than the viewers of the major 24/7 news networks. It is an interesting commentary on things when a comedy show is more informative than a news show.

  4. DeDude says:

    A little naive to think that we can actually raise capital requirements to the point where it would make a significant dent in banksters risk behavior. Higher capital is just a minor bump in the road for the control frauds that milk (run) the banks/investment companies. The loses at Lehman would easily have wiped out even a 25% capital requirement. To stop the ripple effects to the rest of the economy all the CDS and guarantees would have to be backed by 100% capital. As much as Greenspan hates it, there is no way around making certain things illegal because their risk vs. benefit to society don’t justify their existence.

  5. jmay says:

    Greenspan thinks that Daily Show viewers are stupid enough to buy his bogus excuse.

    “We thought people would regulate themselves!”

    No, Alan. You thought the money train wouldn’t crash until after you were dead, and you wouldn’t have to explain yourself.

    Go away, you total failure. Go away.

  6. ilsm says:

    Greenspan is the kind of economist Harry Truman complained about!

    Brad DeLong is posting about Greenspan’s new book: Alan Greenspan: “Fraud” in “The Map and the Territory”

    http://delong.typepad.com/sdj/2013/10/alan-greenspan-fraud-in-the-map-and-the-territory.html

    From the book/post:

    “Much, though not all, of what advocates of broadened oversight of finance are combating falls under the scope of fraud. Again, this is not the province of regulation but of enhanced law enforcement. Misrepresentation, the major source of consumer complaints, is fraud and should be readily addressed in more widespread enforcement of existing law.”

    Policy effects enforcement, if the policy has no regulation what do the “enforcers” do? Employ prosecutors after the crime , with criminal investigators or amateur whistleblowers to follow breaches of no regulations to unwind complex scams/frauds. Tie “economic efficiency” up in the courts? See how Qui Tam and RICO prosecutions work long after the horse has bolted!

    In air safety, putting out bad repairs, building bad designs or selling bad parts are all fraud, the FAA still regulates and performs inspections.

    Is regulation for air safety different than financial safety?

  7. [...] Video interview: Alan Greenspan (former Fed Chairman) on why bankers can’t self-regulate | Jon… The US economy’s transition from Partnership structures to Corporations radically reduced our focus on risk management. The key assumption that people would act rationally in their own self-interest was wrong–or at least a poor model for a world in which corporations are people with their own self-interests. [Reminds me of how different the world was when partners had their own capital at risk, as described by books like The Panic of 1907 &The House of Morgan; crises still occurred, but at least personal liability mattered & mypoic risk taking was one less thing to regulate.] #Deregulation #Joint & Thesis Liability [...]