SOUTHAMPTON, Bermuda, Oct 29 (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Monday securitized assets backed by subprime loans were unlikely to become a problem in the future because markets have lost their enthusiasm for them.
“Markets have made the decision that subprime securitization is much too risky, so problem solved,” Greenspan told a conference on hedge funds. Soaring foreclosure rates on subprime loans made to borrowers with poor credit have severely crimped the U.S. housing market and spurred a tightening of credit globally.
Greenspan also said that a rise in the price of crude oil to $100 a barrel would not be all bad, as it would “break our dependence (on oil) some and we would see smaller cars.”
U.S. crude oil was trading at over $93 on Monday.
The former Fed chief also predicted the real value of the dollar would continue to decline, especially against China’s yuan.
((Reporting by Svea Herbst-Bayliss)) Keywords: USA ECONOMY/GREENSPAN
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