Greenspan warns of capital shortfall

Mark Fightmaster

I know you've just been staying up nights wondering when you would hear from him again, but Federal Reserve Chairman Alan Greenspan emerged yesterday to issue his latest thoughts on the economy. According to Bloomberg, Greenspan stated that the U.S. economy and financial markets "had improved," but he warned that banks face a capital shortfall. Greenspan believes that this shortfall could stall lending and obstruct a recovery.

Good old Greenie started off gently enough, noting that, "Things have unquestionably improved ... everywhere in the world. It's remarkable." However, the tone quickly turned bearish, as Greenie noted, "There is still a very large unfunded capital requirement in the commercial banking system in the United States and that's got to be funded."