High amounts of risk taking prior to the credit crisis were likely to
have dire consequences, but it has turned out to be much broader and more
damaging than anything former Federal Reserve Chairman Alan Greenspan
imagined.
In his prepared testimony to U.S. lawmakers, the former Fed chairman
called the crisis a “once-in-a century credit tsunami”
that will result in a significant rise in unemployment.
“In 2005, I raised concerns that the protracted period of underpricing
of risk, if history was any guide, would have dire consequences…”
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