Another Greenspan Gem
Here Greenspan describes the new technologies that have revolutionized banks’ “basic business … to measure, manage, and accept risk … permitting … the unbundling of risks, improvements in the measurement of risk, and revamping of risk management process.”
“There are some who would argue that the role of the bank supervisor is to minimize or even eliminate bank failure; but this view is mistaken in my judgment. The willingness to take risk is essential to the growth of the free market economy …. [i]f all savers and their financial intermediaries invested in only risk-free assets, the potential for business growth would never be realized.”
Greenspan, Alan. 1994. The New Risk Management Tools in Banking: Address to the Garn Institute of Finance, University of Utah, November 30, 1994.