Alan Greenspan Will Not Take Responsibility For Finanical Crisis

The world will suffer another financial crisis, former Federal Reserve Chief Alan Greenspan told BBC. The crisis will happen again but it will be different, he told BBC Two's The Love Of Money Series. He added that he had predicted the crash would come as a reaction to a long period of prosperity. but while it may take time and be a difficult process the global economy will eventually "Get Through It", Mr. Greenspan added. "They financial crisis are all different but they have one fundamental source,"he said. That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue. Speaking a year after the collapse of Lehman Brothers, which was followed by a worldwide financial crisis and global recession, Mr. Greenspan describe the behavior as human nature. He said the current crisis was triggered by the sub-prime mortgages-home loans given to people with bad credit histories-but added that any factor could have been the catalyst. If it were not a problem of these toxic debts "something sooner or later would emerge," Mr. Greenspan said. Mr Greenspan who ran the Federal Reserve was hailed as a man who could move markets, also warned that the worlds financial institutions should have seen the looming crisis. "The bankers knew that they were involved in an under-pricing risk and at some point a correction would be made, "He said. "I fear that too many of them thought that they would be able to spot the actual trigger point of the crisis in time to get out. He also, warned that England, with it globally-focused economy, would be harder hit than the United States by the current recession and the collapse in world trade. It is going a long while, for England to work it's way through this."In order to prevent the situation from arising again, financiers and governments should look to clamp down on fraud and increase capital requirements for banks, the former central banker said. Regulations targeting latter would mean banks would be forced to hold enough to cover there normal operations an honor withdrawals. The most recent endeavour to re-regulate is a reaction to this crisis. The extraordinary impact of these global markets is making a lot of financial people feeling they have lost control. "The problem is you can not have free global trade with highly restrictive, regulated domestic markets." Finally, Alan Greenspan said that the current economic crisis was a "Once in a century type of event" and one he did not expect to witness. Mr. Greenspan denied any responsibility for the problems gripping the global economy. Mr. Greenspan blamed it on human nature but it was his job as Federal Reserve Chairman to warn the average American about this upcoming financial crisis.