Greenspan sees bigger capital requirement

After the stress test results have determined $75bn of capital shortfall for the 10 big banks who didn’t quite make the cut, and some $56bn raised of capital since then, former Fed Chairman Alan Greenspan still sees a bigger capital need than was identified by the test.

“There is still a very large unfunded capital requirement in the commercial banking system in the United States and that’s got to be funded.”

In an interview in Washington yesterday, he also made a remark on housing sector saying,” until the price of homes flattens out we still have a very serious potential mortgage crisis.”

On GDP, he believes a decline of 1% during the 2nd quarter will happen.

Source: Bloomberg

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