greenspan who ??

[afr1]

how can we trust this guy

LONDON (Reuters) - There will be many casualties from the unfolding financial market crisis, which will lead to a large-scale overhaul of international banking regulations, codes and risk management, former Federal Reserve Chairman Alan Greenspan said.

Writing in the Financial Times, the former Fed chief said much of the financial system's risk-valuation models failed, not because they were too complex but because they were "too simple to capture the full array of variables governing that drive global economic reality".

"The crisis will leave many casualties. Particularly hard hit will be much of today's financial risk-valuation system," he wrote.

While insisting that current risk management models and econometric forecasting methods remain "soundly rooted in the real world," he said risk management can never be perfect.

"It will eventually fail and a disturbing reality will be laid bare, prompting an unexpected and sharp discontinuous response," Greenspan said.

He added, however, that he hoped one of the casualties from the worst U.S. financial crisis since World War Two would not be the spirit of broad self-regulation within financial markets.

Although he said the Basel II international banking regulatory framework would almost definitely be revamped and financial institutions' financial models would need to be re-drafted, Greenspan warned against over-regulation.

"It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition," he said.

[afr1]

now what we got this guy
who we cant trust as well

Power to Pay Interest on Reserves (Update3)

By Craig Torres and Scott Lanman

May 16 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke asked Congress to give the Fed immediate authority to pay interest on reserves deposited by commercial banks, seeking to streamline efforts aimed at alleviating credit strains.

The payments would help officials push money into the banking system without influencing the main policy rate, by giving lenders an incentive to leave funds with the Fed. Congress already passed a law giving the central bank the authority, starting in October 2011.

``We recommend that the date be changed to make the legislation effective immediately,'' Bernanke wrote in a May 13 letter to House Speaker Nancy Pelosi, a California Democrat. ``Congress recognized that payment of interest on reserves would contribute to the efficiency of the financial system.''

Pelosi, after speaking to Bernanke, is reviewing ``the feasibility'' of meeting his request, said Nadeam Elshami, a spokesman for Pelosi.

The benchmark federal funds rate, the overnight lending rate between banks, has at times diverged from policy makers' target in recent months as banks attempted to manage their reserves amid the credit crunch. The fluctuations also came as officials stepped up provision of liquidity to the banking system.

Bernanke, 54, and his colleagues have started twice monthly auctions of cash to banks and opened lending to securities dealers to revive credit markets. Officials have also accepted mortgage debt and other asset-backed securities as collateral for loans.

`Vast Sums'

Interest payments on reserves may give policy makers the ability ``to inject potentially vast sums of money into the system without having an impact on the federal funds rate'' said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co. It would also ``put a floor under'' the rate, he said.

Congress would need to approve the accelerated timetable for the payments, which would then require the president's signature.

Banks are required to hold a proportion of their customers' deposits in an account at the Fed. If the Fed paid interest on surplus reserves, banks would be less inclined to dump the funds into the money markets, pushing the federal funds rate lower.

The New York Fed's Open Market Desk is charged with buying and selling Treasuries with 20 Wall Street securities firms to keep the federal funds rate close to the target set by the Federal Open Market Committee. The desk has struggled to keep it stable as banks raised and lowered their reserves, removing or injecting funds into cash markets.

Rate Fluctuations

On May 14, for example, the benchmark rate fluctuated between 1.75 percent and 7 percent. On April 23, the range was 1 percent to 10 percent.

Under the current statute, the Fed may pay interest ``at a rate or rates not to exceed the general level of short-term interest rates'' starting in October 2011.

The U.S. central bank cut the federal funds rate target to 2 percent April 30 and indicated it may hold off on further reductions. The Fed's Board of Governors discussed paying interest on reserves in a closed session the same day.

Central bank staff began discussions this month with Congress on bringing forward the date that interest can be paid. Fed officials are considering how the program would work, including the rate the Fed would pay.

Pelosi ``will continue to work with'' Representative Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, ``to examine the feasibility of enacting'' the early interest payments, Elshami said.

Frank called the Fed's proposal ``reasonable'' in a May 7 interview. The change would give ``some help to the banking system, and it is fair,'' he said. ``I'm supportive.''

Bernanke sent a copy of his letter to Frank and Representative Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.

[Todd McCreary]

how can you trust Greenspan?

i don't really understand your problem with him. Greenspan spent years talking about "the irrational exuberance" of the stock markets, trying to warn them in publicly acceptable language that they needed to cool down.

the Fed chairman doesn't set lending regulations and he doesn't establish law. that all comes down from Congress and that's who is primarily responsible for f'ing up the home mortgage market.

[afr1]

well i just got a problem with the whole lot of them
he never blew the whistle until it was to late
he waited to long to say anything about the crooks
he let them have there cake and eat it till it was all gone
this new guy will do the same crap im sure

[Todd McCreary]

he never blew the whistle until it was to late

the Fed is powerful, but in extremely restricted ways. telling the stock market that they're being "irrationally exuberant" was the limit of his ability to do anything. the only concrete action available to him would have been to jack the interest rate up 5 points. which would have been unpopular with all of the people who've decided they hate him now. you just would have had a chance to hate him then.

to do more verbally would have required an attack on the policies enacted by Congress and in some cases the President. which would have politicized the office of Fed chairman. which would have brought immediate demands for his resignation or dismissal if not wholesale overhaul of the Fed itself to make it "more responsive" to the wishes of Congress.

IOW, he did what he could do when he could do it.

[afr1]

yea im not informed that much just the way the feds want it to be
rc sent me this
check it out

http://video.google.com/videoplay?do...q=monopoly+men