WASHINGTON — Federal Reserve Chairman Ben Bernanke is doing “an excellent job” running the U.S. central bank, former Fed chairman Alan Greenspan told the CBS program “60 Minutes,” according to excerpts released Thursday.
Mr. Greenspan was asked if he would lower interest rates as dramatically and quickly now as he did just ahead of, during, and after the 2001 recession.
“I'm not sure that's true,” he told CBS. “We were dealing with an environment back then when inflation was easing. We could have acted without the fear of stoking inflationary pressures. You can't do that any more ... I think (Bernanke) is doing an excellent job.”
Mr. Greenspan said he knew about questionable lending practices that were leaving subprime borrowers with adjustable rate loans vulnerable to harm from rising interest rates, but did not recognize those loans would trigger broader problems, CBS said. Such loans are extended to borrowers with poor credit.
“While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” Mr. Greenspan said.
“I really didn't get it until very late in 2005 and 2006,” he added.
