Greenspan's mistake

Greenspan says he made a mistake by believing that public regulation was not necessary and only private entities rules need apply. In particular he says that "counter-party risk management" clearly was not existent. He points to sub-prime mortgage as an industry that showed serious systemic issues.

Self-regulation had become self-dealing. Greenspan then admits that his long held view in the power of deregulation had just been proven invalid. In other words, Greenspan has jumped ship. In his book he laments future crisis for they will bring back knee-jerk reactions of regulation.

Even if this late game endorsement is kind of irrelevant, it is courageous for Mr Greenspan to publicly admit to non-obvious mistakes.