The usually chatty former Fed Chief Alan Greenspan has been noticeably silent about the report issued by the Financial Crisis Inquiry Commision, whose finger was pointed squarely in his direction -- one of the reasons being the first chart in its report, as shown below:
[Click to enlarge]
Those of you who were watching this mess unfold about five years ago no doubt remember how, at the time, Greenspan assured elected officials that banks were well capitalized with nary a distressed asset on the horizon. But that’s not where the action was. The dramatic rise of the shadow banking system, detectable in gross terms as early as 2005, was where the trouble was -- which you’d think would be of interest to the world’s most important banker, if for no other reason than that it was the Federal Reserve that collects this data.
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