Alan Greenspan: 100 years between Wall Street, the Fed and the crises that changed the world

Alan Greenspan, chairman of the Federal Reserve between 1987 and 2006, died on 22 June 2026 at the age of 100. For almost nineteen years under four presidents —Reagan, Bush senior, Clinton and Bush junior—, he was the most influential central banker in the world. His story is also that of a question that remains open.

How he helped the economy and the world#

His greatest virtue was acting fast when the financial system panicked. He was not a theorist: he was a crisis manager.

• He kept several crises from turning into depressions. In 1987, 1998 and 2001 the Fed injected liquidity and confidence, stopping fear from turning into a chain of bankruptcies.
• He consolidated anti-inflation credibility. He inherited Paul Volcker's toughness and kept inflation low, but with more flexibility so as not to choke off growth.
• He accompanied the technological expansion of the 1990s. His reading of productivity made it possible to grow more without triggering inflation during the internet revolution.
• He gave global confidence to the dollar and the markets. One of his speeches moved stock markets, bonds and currencies: the US acted as the anchor of the world financial system.
• He turned central-bank communication into economic policy. After him, managing expectations became as important as moving rates. Today everyone watches Powell or Lagarde just as Greenspan was watched back then.

The dark side of the legacy#

Not everything was stability. Part of the price of that golden decade was paid later, and the 2008 crisis rewrote his biography.

• He trusted too much that markets regulate themselves. He believed banks would control their own risks; 2008 proved the opposite.
• He defended financial derivatives to excess. He saw their usefulness, but did not push for tougher supervision of the opaque (OTC) derivatives that were central to the crisis.
• He kept rates too low after 2001. Cheap, prolonged money fuelled mortgages, leverage and house prices.
• He helped inflate the housing bubble. It was not the only cause, but it was a relevant piece of the later crash.
• He created the «Greenspan put». The idea that the Fed would always rescue the markets reduced the fear of risk… and encouraged bubbles.

Final assessment#

He helped enormously in the short and medium term, but part of the cost was paid later. He was key to avoiding bigger crises in 1987, 1998 and 2001, and his tenure was one of the most prosperous periods of the modern US economy. At the same time, he embodies the great intellectual error before 2008: thinking that a sophisticated financial system could regulate itself almost on its own.

Sources#

• Federal Reserve History — Alan Greenspan
• Federal Reserve — speech on derivatives (1999)
• The Guardian — Alan Greenspan dies aged 100
• Reuters — Seven facts about Alan Greenspan
• El País — El oráculo que no vio venir la tormenta