Alan Greenspan

  • 1987-2006 - Chair of the Federal Reserve 
  • Mark Zandi - Book
  • The Greenspan Put
  • Subprime Mortgage
  • FCIC Interview - Weil, Gotschal (sp), Harvey Miller, Bankruptcy Lawyer - ~~ Greenspan - What would be bad about..
  • Life, automobile, and other insurance sales are virtually riskless and authorizing insurance brokerage sales by banks is likely to add additional convenience and service, as well as lower prices, for the public.

--  Alan Greenspan

1997 0522 - GOV (House) - Statement before the Committee on Banking and Financial Services, US House of Representatives - [link]

  • As a policy matter, the Federal Reserve in the past has chosen not to subject such nonbank subsidiaries to bank-like examination and prudential supervision on the theory that such activities would inappropriately extend "the safety net" of federal protections from banks to nonbanks.1
    • 1 See, e.g., remarks by Federal Reserve Chairman Greenspan before the Annual Meeting of the American Council of Life Insurance, Washington, D.C. (Nov. 15, 1999).

2009 0811 - PWG Working Group on Supervision - FCIC - Questionnaire, OCC22-00362000 - 56p

  • Life insurance companies are also in danger of a major acceleration of loans on outstanding policies at well below market cost of funds if short-term interest rates, especially for money market funds, continue at approximately twice the rate at which most individual policy loan contracts are written.

--  Statement of Alan Greenspan, Townsend-Greenspan & Co., INC., New York, N.Y.

1981 - GOV (JEC) - The 1981 Economic Report of the President, part 1 - [PDF-215p]

  • 1981 - GOV (JEC) - The 1981 Economic Report of the President, part 1 - [PDF-215p]
  • 1985/7 ??? or 1995/1997 - GOV - umbrella Federal Regulator
  • 1999 1115 - Greenspan to ACLI - Remarks by Alan Greenspan, Chairman Board of Governors of the Federal Reserve System before the Annual Meeting of the American Council of Life Insurance - 8p
  • 2008/9 - GOV - Waxman - I was wrong
  • 2008 1021 - GOV (House) - Regulatory Restructuring and Reform of the Financial System, aka Financial Markets Oversight and Regulation - [PDF-270p
    • 4:51:30 - Barney Frank, Mortgages, Federal Reserve, Greenspan - History
  • Mortgages vs Life Insurance
  • One of the problems is that the notion of what is unfair and deceptive is not objective.
    • There are certain practices so egregious that it’s black and white.
      • For example, flipping refinancing in short order—getting people to turn over their mortgage in order to generate fees—that’s egregious.
    • In order for that to happen, the bank or the broker has to say that this is to your advantage, and that’s not the case.
      • It’s a factually based question.
      • Does that actually benefit the homeowner?
    • When you get away from that sort of issue, it gets very fuzzy.
      • These partially require jury trials to decide whether that’s unfair or deceptive. 
    • I didn’t study it, but that’s what the people who did study it told me.
      • If you’re dealing with language that’s not exact, my recollection is that I heard lots of complaints that you need better guidance from Congress about what is unfair.

2010 0331 - FCIC - Interview of Alan Greenspan, Fed - 12p 

⇒  2010 0609 - FCIC - Re: Follow-Up to the Financial Crisis Inquiry Commission Hearing on April 7, 2010 - Alan Greenspan, re: monolines, state insurance regulation, risk transfer- 14p       

  • I would like to end by reemphasizing the necessity of research.
    • Alan Greenspan said that the most important capital in the 1990s are the people who create new ideas.

--  James C. Hickman

1990 - SOA -  Focus 2000: Preparing the Actuarial Profession for the Future, Society of Actuaries - 22p

⇒ Book, Griftopia, Stock Market Bubble 1990s, Greenspan-Ideas, IPOs

  • 1981 - GOV (JEC) - The 1981 Economic Report of the President, part 1 - [PDF-215p]
    • (p11) - Statement of Alan Greenspan, Townsend-Greenspan & Co., Inc., New York, N.Y.
      • Because a goodly chunk of mortgage loans were made many years ago at much lower rates, the average portfolio yield of mortgages in savings and loans associations today approximates 9 percent, approximately half current short-term market yields.
        • At this rate of return, S. & L.'s are extraordinarily exposed.
      • While most of their liabilities consist of relatively short-term high interest cost instruments, there is still well over $100 billion, or approximately 21 percent of liabilities, in conventional passbook accounts at a legal ceiling of 5 1/4 percent.
      • Needless to say, the S. & L.'s are under strong pressure, and were it not for very heavy purchases of mortgages by federally sponsored mortgage pools in the secondary market and heavy direct lending by the Federal Home Loan banks to the S. & L.'s, it would be difficult to imagine these institutions continuing to function.
      • Obviously, in the short run, they can sell off some of their nonmortgage assets to meet the interest payment costs of their liabilities.
        • But obviously, this cannot go on for very long under the existing interest rate structure.
        • At some point, when interest income will no longer consistently meet interest cost requirements, the whole thrift institution system will undergo a massive crisis. 
      • The concern, perhaps, is not that thrift institutions will at that point cave in, but that the Federal Home Loan banks in conjunction with the Federal Reserve would feel obligated to bail out this major segment of our financial system.
      • Such a bailout implies large borrowings by the Federal Home Loan banks, which if accommodated by the Federal Reserve would surely mean major new acceleration of inflation.
      • We could move from the mere 10-percent base rate of inflation; which most-of us estimate for today, to twice that.
    • Life insurance companies are also in danger of a major acceleration of loans on outstanding policies at well below market cost of funds if short-term interest rates, especially for money market funds, continue at approximately twice the rate at which most individual policy loan contracts are written.
    • Obviously, were there a magic wand which could be waved to convert all long-term mortgage portfolios of thrift institutions into variable rate mortgages tied to, say, 1-year Treasury bill rates, then the prospective huge negative cash flow of the thrift institutions could be readily eliminated.
    • But legislation which would abrogate millions of outstanding mortgage contracts to refinance them at higher interest rates seems unlikely in the extreme, is probably unconstitutional, and surely inappropriate.  (p17)
    • <def. Abrogate: repeal or do away with (a law, right, or formal agreement>