By Scott Lanman and Steve Matthews
Oct. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan, under a grilling from lawmakers at a congressional hearing today, conceded a flaw in his free-market ideology that contributed to a ``once-in-a-century credit tsunami.''
``Yes, I found a flaw,'' Greenspan said in response to questions from to the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''
Greenspan said he was ``partially'' wrong in his opposition in recent years to the regulation of derivatives. He said in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.''
Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''
``You were advised to do so by many others,'' he told Greenspan. ``And now our whole economy is paying the price.'' Full Story.