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Quote by Alan Greenspan

“Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear.”

Quote by Alan Greenspan

Author

Alan Greenspan, born on March 6, 1926, is an accomplished economist from the United States. He has made significant contributions to the field of economics and has had a profound impact on the global financial system as the Chairman of the Federal Reserve System. more

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Years Home Fall Years Ago Significant Unusual Decline Equity Adequate Payment Wipe Borrowed Very Deep Residence Home Equity

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Practice Technology Information Capacity Driven Improvement Reach Out Household Borrowing Information Technology Lending Lenders

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“I believe that the general growth in large [financial] institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically -- I should say, fully -- hedged.”

Should Believe I Believe Growth Risk Institutions Structure Financial Financial Institutions

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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.”

Use Greater Growing Risk Keys Approach Institutions Financial Resilience Factors Related Application Sophisticated Measuring Derivatives Financial Institutions Financial Risk

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“I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”

Made Self Interest Mistake Capable Firm Equity Self Interest Made A Mistake Organisation Shareholders I Made A Mistake Presuming

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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?”

Knows Past Values Subjects Decades Unexpected Japan Assets Irrational Over The Past Exuberance Contractions

Book:The Age of Turbulence: Adventures in a New World

Source: The Age of Turbulence: Adventures in a New World

“We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability.”

Ifs Needs Doe Real Jobs Economy Concerned Financial Productions Assets Stability Bubbles Bankers Price Stability

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“By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.”

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“Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. 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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