What happens when you leave financial institutions to regulate themselves? How much deregulation can be accepted? This is a debate that started with the subprime mortgage crisis in USA. What Alan Greenspan, the person who promoted deregulation in financial markets has to say about it?
Congressman Henry Waxman “My question is simple. Were you wrong?”
Alan Greenspan: Partially ..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.
Congressman Henry Waxman: You found that your view of the world, your ideology, was not right, it was not working?
Alan Greenspan: That’s precisely the reason I was shocked because I’d been going for 40 years or so with considerable evidence that it was working exceptionally well.