No, Greenspan was not misquoted as it was an article he wrote for the Financial Times (Drudge has a link). Greenspan’s thesis is that rating agencies are to blame for not properly valuing market risk. While this is certainly true, again, Greenspan fails to point out that it was on his watch that he left the 1% punchbowl out waay too long that created a feeding frenzy environment which led to the current mortgage crisis.
“Derivatives have permitted financial risks to be unbundled in ways that have facilitated both their measurement and their management…. As a result, not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.”~~Alan Greenspan, May 2003
"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."~~Alan Greenspan, February 22, 2004
“The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions.”~~Alan Greenspan, May 2005
"We're not about to go into a situation where (real estate) prices will go down. There is no evidence home prices are going to collapse."~~Alan Greenspan, May 21, 2006