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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
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More quotes by Alan Greenspan

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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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But rules cannot substitute for character.
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When trust is lost, a nation's ability to transact business is palpably undermined.
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If we are to remain preeminent in transforming knowledge into economic value, America's system of higher education must remain the world's leader in generating scientific and technological breakthrough, and in meeting the challenge to educate workers.
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I'm not denying that monopolies are terrible things, but I am denying that it is readily easy to resolve them through legislation of that nature.
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Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
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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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We will have more crises and none of them will look like this because no two crises have anything in common except human nature.
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Since I've become a central banker, I've learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.
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The guiding purpose of the government regulator is to prevent rather than to create something.
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I must say, I never expected to see the day where I would be talking about anything other than reducing the debt, I'm running into the tyranny of zero, which is where you can't reduce (the debt) any more
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We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures. Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief.
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We may be in a rapidly evolving international financial system with all the bells and whistles of the so-called new economy. But the old-economy rules of prudence are as formidable as ever. We violate them at our own peril.
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I'm always amazed that my wife can handle different subjects - one day politics, the next day foreign policy. And she always has so much fun doing it. We make a good team.
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Anything that we can do to raise personal savings is very much in the interest of this country.
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If I've made myself clear, I've misspoken.
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Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day that proves disastrous. And my view is I don't think we can play subtle policy here.
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But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
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I don't know where the stock market is going, but I will say this, that if it continues higher, this will do more to stimulate the economy than anything we've been talking about today or anything anybody else was talking about.
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