Thursday 21 May 2009 8:00 pm

Greenspan issues bank warning

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Alan Greenspan, the former chairman of the Federal Reserve, warned yesterday that US banks may have to raise significant amounts of money before the economy can recover.

“There is still a very large unfunded capital requirement in the commercial banking system in the United States,” he said. Greenspan, who has been blamed by some for contributing to the credit pile-up that spawned the global recession, said the US economy had improved. But he also pointed out that there were still problems in the American housing market, which could cause a mortgage crisis.