He pretended that he did not stand in the way of regulating the over the counter derivatives market when it was first suggested. In fact he killed it during the Clinton administration. He attempted to rewrite history. Trust me on this story. Greenspan just put blood in the water today. The true story of what happened will continue to come out. It was the over the counter derivatives that gave Freddie Mac & Fannie Mae their power.
Please elaborate.
You’re correct except for the Fannie and Freddie part. OTC derivatives were the province of investment banks and similar firms that had created a huge market in their own securitized debt paper. This is all described by Gillian Tett.
Why did Fannie and Freddie need derivatives? They had a government guarantee.