VOA标准英语10月-Former US Fed Chief: Credit 'Tsunami' Having Seri

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Alan Greenspan testifies before House Oversight2 and Government Reform Committeeon Capitol Hill, 23 Oct. 2008

The longest-serving chairman of the U.S. central bank until he was replaced by Ben Bernanke in 2006, Greenspan called the financial and credit crisis a "once in a century credit tsunami" brought about by heavy demand for securities backed by sub-prime mortgages.

The crisis has been much broader than anything I could have imagined, Greenspan said, leaving him and other economic experts in a state of shocked disbelief.

"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs³ and unemployment," he said. "Fearful American households are attempting to adjust as best they can to a rapid contraction⁴ in credit availability, threats to retirement⁵ funds and increased job insecurity."

For the crisis to end, Greenspan added, U.S. housing prices must stabilize⁶, something he said is still many months in the future.

A future economic landscape, he said, would be characterized by exceptional investor⁷ caution, particularly where investment instruments are concerned, leading to a more sustainable sub-prime mortgage market.

Greenspan has faced criticism that as Federal Reserve chairman for more than 18 years, he resisted tighter market regulation, and kept U.S. interest rates too low, fueling a surge in risky⁸ sub-prime mortgages.

Committee Democrats¹⁰ questioned decisions and statements he made about the U.S. housing market.

Democratic panel chairman Henry Waxman asked if the crisis has changed his ideological¹¹ positions on regulation and the operation of free markets.

"In other words, you found that your view of the world, your ideology¹² was not right, it was not working," asked Waxman.

"Precisely¹³, that is precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well," Greenspan replied.
　

Alan Greenspan (l), Chairman of the SEC Christopher Cox (center) and Former Treasury14 Secretary John Snow on Capitol Hill, 23 Oct 2008

Securities and Exchange Commission chairman Christopher Cox was sharply challenged by Maryland Democrat⁹ Elijah Cummings about efforts now to crack down on one aspect of the credit mess.

Cummings: "You became SEC chairman over three years ago. Why didn't you act sooner to require this disclosure of credit default swaps¹⁵?"

Cox: "If you wish me to answer explicitly¹⁶, where was I, I was here with you, indeed I was vice-chairman of this committee, when Congress had the opportunity to do what I am asking Congress to do now, which is to close this regulatory hole."

Cummings: "But I'm talking about the three years that you were there, we paid your salary, the taxpayers¹⁷ the ones that are losing their homes right now paid your salary for three years."

Minority Republicans also questioned decisions by Greenspan, Cox, and former Treasury Secretary John Snow, although Republican criticisms were not as sharp as Democrats.

In a separate hearing, the U.S. treasury official overseeing the $700 billion program approved by Congress to rescue financial institutions, said it is having a positive effect, but Neel Kashkari added a cautionary note.

"Since the announcement of our capital purchase program, we have seen numerous signs of improvement in our markets and in the confidence in our financial institutions," he said. "While there have been recent positive developments, the markets remain fragile."

Thursday's hearing took placed amid continued volatility¹⁸ in U.S. financial markets, amid investor concerns about the economy, and new figures showing increases in home foreclosures.

At the White House, press secretary Dana Perino declined to use the word recession to describe the economic situation, but said President Bush knows the country is in "for a rough ride."