Alan Greenspan Inside Job Analysis
Answer the following questions as precisely as you can. Please try to be brief and to the point whenever possible.
Question 1: Do you think events would have unfolded differently if the U.S. banks that made subprime loans had kept them instead of selling them to the Wall Street companies? Explain briefly
Question 2: Are all CDOs risky at all times? How/why are the top tranches of CDOs relatively safe even though they are created from sub-prime loans? …show more content…
The film describes how Greenspan, as Federal Reserve chairman, led the deregulation and consolidation of the financial sector, beginning in the 1980s. One of the questions the film raises is about Greenspan’s ideology. In the film, Robert Gnaizda, former director of the Greenlining Institute, discusses a series of meetings in which Greenspan recognized the complexity of subprime mortgages, and refused to regulate them. Gnaizda concluded, “It was clear he was stuck with his ideology.” - What was the ideology and reasoning that prevented Alan Greenspan from regulating the subprime mortgage and derivatives markets? What are the potential benefits of this ideology? - To what extent was Greenspan right? - How was he wrong? Be