자료 1: Testimony of Dr. Alan Greenspan, Committee of Government Oversight and Reform (October 23, 2008)
( ... ) We are in the midst of a once-in-a century credit tsunami. Central banks and governments are being required to take unprecedented measures. ( ... )
It was the failure to properly price such risky assets that precipitated the crisis. In recent decades, a vast risk management and pricing system has evolved, combining the best insights of mathematicians and finance experts supported by major advances in computer and communications technology. A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivat[iv]es markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria. Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today, in my judgment.
자료 2: The whole intellectual edifice (New Yorker, October 23, 2008)
자료 3: Greenspan's Lament (The New York Times, October 23, 2008)
자료 4: Notes from the Editors (Monthly Review, December 2008, Volume 60, Number 7)
자료 6: The New York Times, Thursday, October 23, 2008
Facing a firing line of questions from Washington lawmakers, Alan Greenspanㅡthe former Federal Reserve chairman once considered the infallible "maestro" of the U.S. economyㅡadmitted Thursday that he was wrong to trust free markets to regulate the financial system without stronger government oversight.
A fervent proponent of deregulation during his 18-year tenure at the Fed's helm, Greenspan has faced mounting criticism this year for having adamantly resisted efforts to rein in credit derivatives, an unchecked market whose excesses partially led to the current financial crisis.
"I have found a flaw" in free market theory, Greenspan said ( ... ) "I don't know how significant or permanent it is. ( ... ) But I have been very distressed by the fact."
In his testimony, Greenspan rejected the notion that he was personally responsible for what he called a "once-in-a-century credit tsunami." ( ... ) Pressed by Waxman, Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan said. Waxman pushed the former Fed chief, who left office in 2006, to clarify his explanation. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said. "Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
Waxman challenged Greenspan's approach to regulating the mortage industru while he was Fed chairman, saying that the FEd "had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market." But Greenspan, Waxman said, "rejected pleas that he intervene." ( ... )
Saying that his thinking "has evolved" in the past year, Greenspan also defended his record. "In 2005, I raised concerns that the protracted period of underpricing of risk, if history was any guide, would have dire consequences, " he said. "This crisis, however, has turned out to be much broader than anything I could have imagined." ( ... )
자료 7: International Herald Tribune, Thursday, October 23, 2008.
( ... ) As far back as 1994, Greenspan staunchly and successfully opposed tougher regulation on derivatives. But on Thursday, he agreed that the multi-trillion-dollar market for credit default swaps, instruments originally created to insure bond investors against the risk of default, needed to be restrained.
"This modern risk-management paradigm held sway for decades," he said. "The whole intellectual edifice, however, collapsed in the summer of last year."
Waxman noted that the Fed chairman had been one of the nation's leading voices for deregulation, displaying past statements in which Greenspan had argued that government regulators were no better than market at imposing discipline. "Were you wrong?" Waxman asked. "Partially," the former Fed chairman reluctantly answered, before trying to parse his concession as thinly as possible. ( ... )
But as the Fed slashed interest rates to nearly record lows from 2001 until mid-2004, housing prices climbed far faster than inflation or household income year after year. By 2004, a growing number of economists were warning that a speculative bubble in home prices and home construction was under way, which posed the risk of a housing bust.
Greenspan brushed aside worries about a potential bubble, arguing that housing prices had never endured a nationwide decline and that a bust was highly unlikely. Greenspan, along with most other banking regulators in Washington, also resisted calls for tighter regulation of subprime mortgages and other high-risk exotic mortgages that allowed people to borrow far more than they could afford.
The Federal Reserve had broad authority to prohibit deceptive lending practices under a 1994 law called the Home Owner Equity Protection Act. But it took little action during the long housing boom, and fewer that 1 percent of all mortgages were subjected to restrictions under that law. This year, the Fed greatly tightened it restrictions. But by that time, the subprime market as well as the market for other kinds of exotic mortgages had already been wiped out. ( ... )