for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Greenspan: Subprime securitization seen too risky

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

C Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nWAT008384

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up