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The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions... Derivatives have permitted the unbundling of financial risks.

Alan Greenspan

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Alan Greenspan
Age: 98
Born: 1926
Born: March 6
Banker
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New York City
New York
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More quotes by Alan Greenspan

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Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities.
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If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.
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The free lunch has still to be invented.
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Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.
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You can't have the capitalist system if an increasing number of people think it is unjust.
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[Republicans] swapped principle for power. They ended up with neither. They deserved to lose.
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But rules cannot substitute for character.
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This decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from the financial markets. Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
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Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
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We cannot rule out a situation in which a preemptive policy tightening becomes necessary, ... Such caution seems especially warranted with regard to the sharp rise in equity prices during the past two years. These gains have obviously raised questions of sustainability.
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If I've made myself clear, I've misspoken.
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I love to play tennis and golf, listen to music, watch baseball and root for the Redskins.
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Whatever you tax you get less of.
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Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.
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The probability of ten consecutive heads is 0.1 percent thus, when you have millions of coin tossers, or investors, in the end there will be thousands of very successful practitioners of coin tossing, or stock picking.
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In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending.
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At the risk of some oversimplification, if the skill composition of our work force meshed fully with the needs of our increasingly complex capital-stock, wage-skill differentials would be stable, and the percentage changes in wage rates would be the same for all job grades.
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No matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.
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Productivity is notoriously difficult to predict.
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History has not dealt kindly with the aftermath of protracted periods of low risk premiums.
Alan Greenspan