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What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so.

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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Finance

More quotes by Alan Greenspan

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There is nothing to guarantee the superior judgment, knowledge, and integrity of an inspector or a bureaucrat-and the deadly consequences of entrusting him with arbitrary power are obvious.
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History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.
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...our market system depends critically on trust-trust in the word of our colleagues and trust in the word of those with whom we do business.
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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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Institutions of the newer participants in global finance had not been tested, until recently...recent crisis have underscored certain financial structure vulnerabilities that are not readily assuaged in the short run.
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While local economies may experience significant price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity.
Alan Greenspan
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It's hard to overemphasize how important Ford's deregulation was. True, most of the benefits took years to unfold-rail freight rates, for example hardly budged at first. Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s.
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I'm a better economist than I was a sax player.
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If I say something which you understand fully in this regard, I probably made a mistake.
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We need, in effect, to make the phantom 'lock-boxes' around the trust fund real.
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If prices go down, we will have problems - problems in the sense of spillover to other areas.
Alan Greenspan
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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.
Alan Greenspan
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Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern.
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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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Amateurs want to be right. Professionals want to make money.
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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.
Alan Greenspan
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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.
Alan Greenspan
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When trust is lost, a nation's ability to transact business is palpably undermined.
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There is no evidence that the business cycle has been repealed.
Alan Greenspan
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Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
Alan Greenspan