Alan Greenspan, the towering figure who shaped the global financial system for nearly two decades as chairman of the US Federal Reserve, has died aged 100. His passing marks the end of an era for an economic philosophy that, in the City of London, is at once revered for its boom years and reviled for the crash that followed.
Greenspan took the helm of the Fed in 1987, steering the world’s largest economy through stock market crashes, the dot-com bubble, and the rise of complex derivatives. His tenure was defined by a deep faith in free markets and a reluctance to regulate. During the 1990s, low inflation and soaring productivity earned him the moniker “maestro” from admirers. But his legacy is indelibly scarred by the 2008 financial crisis, which many economists trace back to his policies of low interest rates and deregulation. When it all came crashing down, Greenspan admitted to a “flaw” in his worldview: he had overestimated the ability of markets to self-correct.
In the Square Mile, the reaction was predictably mixed. A senior trader at a major London bank, speaking on condition of anonymity, said: "Greenspan was a giant. He kept the party going for longer than anyone thought possible. But the hangover was brutal. We’re still paying for it." Others, particularly those in the asset management sector, pointed to his role in creating the conditions for the long bull run that made fortunes in the City. “Without Greenspan, the global economy would be a very different place. He had the courage of his convictions, even if those convictions turned out to be flawed,” said a fund manager.
But for many outside the City towers, Greenspan’s legacy is one of inequality and instability. Union leaders were quick to criticise. “Greenspan’s ‘Great Moderation’ meant stagnant wages for ordinary workers while the financial elite got richer and richer. His policies were a disaster for the working class,” said a spokesperson for the Trades Union Congress. The cost of living crisis that continues to grip Britain has deep roots in the financial deregulation that Greenspan championed, they argued.
The mayor of Greater Manchester, Andy Burnham, also weighed in: “The North remembers the devastation wrought by the financial crash. Greenspan’s economic model left regions like ours behind. We need a different path, one that values productive industry over casino banking.”
Greenspan was born in 1926 in New York City. He studied economics under the great free-market thinker Ayn Rand, whose influence stayed with him throughout his career. After leaving the Fed in 2006, he ran his own consulting firm and remained a sought-after commentator. Even in his later years, he defended his record, insisting that the housing bubble was due to global forces beyond his control.
Critics point out that he never fully apologised for the 2008 crash, which wiped out savings and jobs across Britain. Many families still haven’t recovered. For them, Greenspan’s death is a reminder of a system that enriched a few while leaving millions vulnerable.
As the City lowers its flags to half-mast, the debate over Greenspan’s impact will only intensify. For some, he was the wizard of modern finance. For others, he was the man who proved that market magic can turn into calamity. One thing is certain: the economy he helped build will outlive him, for better or worse.
