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In a rare interview granted to the ´óÏó´«Ã½ Two documentary series The Love Of Money, former chairman of the Federal Reserve, Dr Alan Greenspan, claimed that bankers knew they were under pricing risk but thought they could get out before the financial crisis hit.

Dr Greenspan says: "What happened to the bankers – yes they knew that they were involved in an under pricing of risk and at some point that correction would be made. I fear that too many of them thought they would be able to spot the actual trigger point of the crisis in time to get out."

Seen by many as a key architect of the global free market economy and the crash of 2008, 83-year-old Dr Greenspan also argues that human nature will lead to a repeat of events similar to those that have unfolded around the world over the last year.

"Crisis will happen again but it will be different. They are all different but they have one fundamental source and that is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that that will continue and they begin to take speculative excesses with the consequences that have dotted the history of the globe, basically since the beginning of the 18th, 19th century or back to the South Sea Bubble...or even before.

"It's human nature – unless somebody can find a way to change human nature we will have more crises – none of them will look like this because no two crises have anything in common except human nature."

When asked how he feels about being singled out as the person most responsible for the crisis, Dr Greenspan says: "You know I'm not saying I'm flawless and I've made no mistakes... that's ridiculous."

He goes on to cite the importance of the rise of China as a world financial powerhouse in bringing about the crash. With its virtually limitless supply of cheap labour it had grown to become a major player in the global free market, resulting in low interest rates and cheap money, and this helped to inflate the Western asset bubble.

"As a result of the shift of the developing world towards an ever-increasing emphasis on competitive markets, there was explosive growth. And the growth was so rapid and the income increases were so rapid that you could not get enough spending to absorb the income."

Any use of information in this release must credit ´óÏó´«Ã½ Two's The Love Of Money, which starts on Thursday 10 September.

Notes to Editors

The Love of Money is a three-part series from the Money Programme team starting on Thursday 10 September 2009 at 9.00pm on ´óÏó´«Ã½ Two.

Episode 1 – The Bank that Bust the World (9.00pm, Thursday 10 September, ´óÏó´«Ã½ Two)
Episode 2 – The Age of Risk (9.00pm, Thursday 17 September, ´óÏó´«Ã½ Two)
Episode 3 – Back From the Brink (9.00pm, Thursday 24 September, ´óÏó´«Ã½ Two)

PH