Global financial turmoil...Greenspan defends his policies

The Financial Crisis Inquiry Commission of the United States began a three-day hearing, focusing on the causes behind the sub-prime mortgage meltdown that almost led to a second Great Depression and wiped out several top Wall Street institutions. Former Federal Reserve chairman Alan Greenspan said that while steps can be taken to limit the impact of another shock, regulators can't fully prevent another crisis from happening. Greenspan defended his record and blamed the proliferation of securitised subprime mortgages for triggering the financial crisis. He said that although he was concerned about booming home prices as early as 2002, he did not expect the boom to continue for so long.

Separately, two former top executives of Citigroup publicly apologized for the financial crisis and the near collapse of the financial services giant that required a taxpayer bailout of US$45bn. Prince's mea culpa came on the second of three days of hearings by the Financial Crisis Inquiry Commission into the subprime mortgage meltdown. He was followed by former Citi board chairman, Robert Rubin, who expressed regret for the failure of the firm and others to see the approaching financial turmoil. Prince said risk assessments by Citigroup on about US$40bn of highly rated securities based on subprime mortgages turned out to be dramatically wrong. But he said he could not fault company employees for acquiring those assets because of their AAA-plus credit ratings.