LONDON (AFP) - Former Federal Reserve chief Alan Greenspan said human nature made another global financial crisis inevitable

LONDON (AFP) - - Former Federal Reserve chief Alan Greenspan said human nature made another global financial crisis inevitable, in an interview with BBC television on Wednesday.
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"They (financial crises) are all different, but they have one fundamental source," Greenspan said.

"That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue."

The belief that markets would continue to rise led people "to take speculative excesses with the consequences that have dotted the history of the globe basically since the beginning of the 18th or 19th century."

He added: "No two crises have anything in common except human nature."
Speaking as the global economy is showing signs of recovery a year after the collapse of US investment bank Lehman Brothers, Greenspan predicted the world would also "get through" the next crisis.

He said that while the current crisis was triggered by the trade in US sub-prime mortgages, any factor could have been the catalyst.

If it were not the problem of these toxic debts caused by people's failure to repay the loans that were granted to homebuyers with bad credit histories, "something sooner or later would have emerged," Greenspan said.

He added that the world's financial institutions should have seen the looming crisis.
"The bankers knew that they were involved in an under-pricing of risk and that at some point a correction would be made," Greenspan said.

"I fear too many of them thought they would be able to spot the actual trigger point of the crisis in time to get out."

Greenspan has been blamed by some for failing to do more to prevent the crisis, but he denied any responsibility for the problems gripping the economy.

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

To avoid a repeat of the situation, financiers and governments should look to clamp down on fraud and force banks to hold more capital to cushion themselves against financial shocks, the former central bank chief said.

But he urged governments to steer clear of protectionism because applying strict regulations could hamper global trade.

"The most recent endeavour to re-regulate is a reaction to the crisis. The extraordinary impact of these global markets is making a lot of financial people feeling they have lost control.
"The problem is you cannot have free global trade with highly restrictive, regulated domestic markets."