Alan Greenspan Admitted Error in 2008 Crisis, Citing Failed Self-Regulation
Updated
Updated · The New York Times · Jun 22
Alan Greenspan Admitted Error in 2008 Crisis, Citing Failed Self-Regulation
3 articles · Updated · The New York Times · Jun 22
Summary
Oct. 23, 2008 marked the moment Alan Greenspan told a House committee he was in “shocked disbelief” that banks’ self-interest had failed to protect shareholders and the financial system.
That admission came as Bear Stearns and Lehman Brothers had collapsed, Washington was taking equity stakes in banks, and households were buckling under mortgage debt in a brutal recession.
Greenspan’s testimony carried unusual weight because, until retiring less than three years earlier, he had been the Fed chair most closely identified with free-market faith and resistance to tighter financial regulation.
The episode is framed as the defining legacy of his career: a rare public acknowledgment that the principles he had long championed did not hold in a moment of systemic crisis.