Former US Federal Reserve Chairman Alan Greenspan has said that a repeat of the crisis that brought the country close to default is “perfectly conceivable”.
Mr Greenspan, the most powerful figure in economic policy when he ran the Fed between 1987 to 2006, spoke to the BBC’s Evan Davis ahead of publication of his new book, The Map and the Territory.
In a wide-ranging interview to be broadcast on Radio 4’s Today programme and the World Service’s Business Daily, the former Fed chief had strong words for those who thought the eurozone crisis was over.
“What Britain has done with its austerity programme has worked much better than I thought it would,” Mr Greenspan said.
Mr Greenspan also defended his record at the Fed against criticism that easy-credit policies and light-touch regulation had contributed substantially to the 2008 financial crash.
Mr Greenspan told Evan Davis that Chinese innovators should “think outside the box” more Mr Greenspan, 87, who now runs his own consultancy business, also criticised a growing “crony capitalism” in the US.
“What they are going to find, I suspect sooner rather than later, is that unless they pick up innovation very specifically, their growth is going to slow down,” Mr Greenspan said.