Greenspan talks on regulation

NEW YORK, Feb. 18 (UPI) -- Former Federal Reserve Chairman Alan Greenspan said at the Economic Club in New York that new regulations were needed to rein in financial systems.

After a long career in which Greenspan advocated for modest federal regulation, Greenspan said in a speech Tuesday he saw "no alternative to a set of heightened federal regulatory rules for banks and other financial institutions," Politico reported.

Greenspan warned housing prices would continue to drop, falling as much as 10 percent further.

His remarks on regulation have been a gradual turn-around, Politico said. Last fall, Greenspan said he was "distressed at how far we have let concerns for reputation slip in recent years," a signal that individual decisions had led the way to the financial downturn.

Greenspan, Fed chairman for 20 years, is "playing for the history books," William Fleckenstein, a hedge fund manager whose book, "Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve" was published in 2008, told Politico.

But, John Castellani, president of the Business Roundtable, said it was "unfair to go back and look at this (downturn) in reverse."

"Remember … it was Alan Greenspan who warned about 'irrational exuberance,'" Castellani said to Politico.