Greenspan: ‘I Suspect’ More Financial Institutions Will Fail
By Daniel at 14 September, 2008, 12:34 pm
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Greenspan: ‘I Suspect’ More Financial Institutions Will Fail
Last Update: 9/14/2008 11:11:12 AM
DOW JONES NEWSWIRES
Noting that the mortgage crisis hitting the U.S. is “probably once in a century
type of event,” former Federal Reserve Chairman Alan Greenspan said Sunday he
suspects more major financial institutions will fail.
Greenspan, appearing in an ABC television network interview, was asked if we will
see more major financial institutions fail.
“I suspect we will,” he said. “But in and of itself that does not need to be a
problem. It depends on how it’s handled and how the liquidations take place. And
indeed, we shouldn’t try to protect every single institution.”
When asked if he thought the chances of escaping recession were now greater than
50%, Greenspan said, “No, I think it’s less than 50%.”
Greenspan also said he thought the government was trying to help Lehman Brothers
(LEH) in a different manner than with the Bear Stearns rescue in that it’s trying
to find a way in which there is no government money involved.
He said he couldn’t make a judgment on whether Lehman should be allowed to
liquidate because he didn’t have enough information to go on.
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