A Financial Times op-ed from former Fed chair Alan Greenspan has caused a minor uproar among regulators and pundits, according to the Huffington Post.
In the op-ed, Greenspan warned that regulations of foreign exchange derivatives currently under consideration at the Treasury Department could "distort" the market and cause significant portions of the trade to leave the U.S. The Huffington Post says that this type of derivative was the most profitable variety for American banks last year, citing statistics from the Comptroller of the Currency as saying that the top five banks alone saw $9 billion in profits.
However, some pundits, like former U.S. Commodity Futures Trading Commission director Michael Greenberger, told the news source that Greenspan's comments were ill-advised and not based on reality.
"[Greenspan's] article reads like it's written from another universe. And it essentially is playing with dice, because it assumes that we are out of all problems: that unemployment is fine, that people's pensions are in place, that the housing market is stable and that everything is fine," he said.
Greenspan has been widely criticized for a hands-off approach to regulation, which his detractors say was partially responsible for the recent financial crisis.
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